Investigating Market Power and Efficiency of Concentration in Meat Sale Market in Fars Province

Assessing market power and determining market structure of various agricultural as well as industrial products have always been considered as important issues in microeconomics. Different market structures can have major effects on levels of productions as well as on prices of various products. This study was conducted to determine the structure of meat sale market applying New Empirical Industrial Organization (NEIO) approach to a sample of meat prices, to investigate market power and cost efficiency of meat industry in Fars province. Date used in this study consist of sheep and cow and calf carrion price at the stockyard door, retail price of sheep and cow and calf meat, wage price index, energy price index and transportation price index in the industry sector. The results revealed that firms in sheep and cow slaughter industry have market power (market power effect for firms in sheep and cow slaughter are respectively 0.893 and 0.751) and can gain from collusions with each others to supply their products to the retailers with higher prices and therefore, decreasing concentration in this industry is suggested.