International Journal of Business and Economics Volume 1, No. 1 April​, 2002

Consumer and Trade Prices in General Equilibrium with Imperfect Competition

Gareth D. Myles

Department of Economics, University of Exeter, U.K.

Abstract

A two-sector model of imperfect competition with intermediate goods is analyzed. An objective demand function is constructed and equilibrium studied through simulation. The results indicate that trade prices may exceed consumer prices and that collusion between firms may benefit both firms and consumers and result in intermediate goods trading at less than marginal cost.

Keywords：prices, equilibrium, oligopoly.

JEL Classifications：D5, L1.

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