Optimal Concentration and Deadweight Losses in Canadian Manufacturing

  title={Optimal Concentration and Deadweight Losses in Canadian Manufacturing},
  author={Vaughan A. Dickson and Jian He},
  journal={Review of Industrial Organization},
  • V. Dickson, Jian He
  • Published 1 December 1997
  • Economics
  • Review of Industrial Organization
When economies of scale are impontant, there may be too many firms in a market to effectively exploit these scale economies. Although more firms imply reduced market power, this may not offset the adverse impact of higher unit cost. We explore this trade-off by estimating for 107 Canadian industries optimal concentration, this being the concentration that maximizes, for given firm conduct, producers and consumers' surplus. We then calculate deadweight losses as the difference between total… 
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