Average profits of a price taker are increasing in the variability of the output price (Oi, 1961). We show that, for … the same reason, average profits of the price taker are increasing in the variability of the price of inputs. We proceed … firm with market power is very convex, the profit function of the price taker forms an upper limit for the convexity of …

To the surprise of many, price deviations between markets characterized by imperfect competition have often been little … lower transport costs are, in many cases, associated with greater price differentials between markets. The intuition is that … differentiation and costs of segmenting. -- price discrimination ; market integration ; law of one price …