Résumé
This paper develops a tractable framework for monopoly and monopolistic com-petition with non-constant marginal costs. Flexible cost structures are summarized by sufficient statistics: the contribution margin, a profitability scale factor, and a composite curvature index. The scale factor measures the elasticity of operating profits to market size and governs the wedge between the contribution margin and the Lerner index. The framework delivers pass-through formulas for cost shocks and links its objects to accounting, demand, production, and pass-through data. Applied to market expansion, it shows how flexible costs can amplify, dampen, or overturn Matthew effects (“Rich get richer, poor get poorer").
Mots-clés
Cost Pass-Through; Cost Structure; Heterogeneous Firms; Globalization;
Codes JEL
- D21: Firm Behavior: Theory
- F12: Models of Trade with Imperfect Competition and Scale Economies • Fragmentation
- F61: Microeconomic Impacts
Référence
Philippe Bontems, « Not so Costly: Cost Structure and Firm Behavior », TSE Working Paper, n° 26-1760, juin 2026.
Voir aussi
Publié dans
TSE Working Paper, n° 26-1760, juin 2026