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Impacts of Market-Share Patterns on Marketing Firm Costs

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  • Ronald Raikes
  • Arnold Heubrock

Abstract

Uniform market-share patterns have been assumed in specifying cost functions for assembly or delivery operations. A more realistic assumption is that market share decreases with distance from the plant. Procedures for specifying assembly or delivery-cost functions for alternative linear market-share patterns and for determining impacts of changes in market-share patterns on costs and related results are developed and applied in an analysis of anhydrous ammonia retailing. These procedures permit more accurate estimates of cost-volume relationships and make it possible to address questions about how firms should attempt to achieve volume increases.

Suggested Citation

  • Ronald Raikes & Arnold Heubrock, 1976. "Impacts of Market-Share Patterns on Marketing Firm Costs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 58(4_Part_1), pages 693-702.
    • Handle: RePEc:oup:ajagec:v:58:y:1976:i:4_part_1:p:693-702.
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