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| Author: | Goldstein, J. |
| Title: | Markup variability and flexibility : theory and empirical evidence. |
| Journal: | Journal of Business
1986 : OCT, VOL. 59:4, part 1, p. 599-621 |
| Index terms: | PRICE THEORY BUSINESS CYCLES REGRESSION ANALYSIS |
| Language: | eng |
| Abstract: | An alternative theory of markup pricing is summarized and empirically tested. It is concluded that over the typical business cycle the markup rises from initial through until the midwayexpansion and then declines until the terminal through and markup flexibility is positively related to the degree of demand competition. This cyclical pattern of markup variability is shown to exist in major industry groups for all postwar cycles up to 1980.Regression analysis reveals that in highly concentrated industries a positive relation exists between markup flexibility and the level of import competition and a proxy for the elasticity of demand. |
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