Document Type

Article

Publication Date

10-15-1993

Keywords

market structures, cattle production, cattle industry, slaughter cattle

Abstract

In terms of population and income, South Dakota is a small, rural state relative to the rest of the nation. South Dakota's 1992 Gross State Product (GSP) was roughly 12 billion dollars, which implies South Dakota contributes .2% toward U.S. Gross Domestic Product (GDP). The agricultural sector of the South Dakota economy contributed approximately 10% to GSP in 1992. The beef industry is the largest agricultural subsector in the state. In 1992, it generated 1.3 billion dollars in marketing revenue and produced approximately 41% of agriculture's contribution to GSP. The importance of the beef industry to the South Dakota's economy merits an examination of the market structure which has evolved for the selling of slaughter cattle in South Dakota. This essay examines the effect of relaxing the assumptions of the competitive model on firm behavior and market structure. The perfectly competitive market model is based on the following assumptions: 1) a large number of buyers and sellers who are price takers in the market; 2) freedom of firm entry and exit; 3) all participants in the market have complete information on all relevant market characteristics; 4) buyer preference and cost structures are identical and the same is true for sellers; and 5) firms (beef producers) produce a homogeneous product.

Publisher

Department of Economics, South Dakota State University

Series Number

93-9

Number of Pages

10

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