THE RELATIONSHIP BETWEEN MANAGERIAL HEURISTICS AND ECONOMICS IN PRICING RETAIL MEATS

This study develops a theoretical model of the multiproduct firm which allows for imperfect competition in the output market. Hypotheses are tested for retail meat prices concerning the degree and speed of price transmission, the effects of interfirm competition, and the interrelationship between prices within the store. Empirical results indicated that meat prices within a store were highly interrelated. Further, the firm was found to be very responsive to prices of competitors in the short run, but more responsive to wholesale price changes in the long run.