Measuring barriers to entry, welfare costs of monopoly and parametric measurement of economies of scale: a case study of the food industry

Document Type : applicative

Authors

Assistant Professor, Department of Economics, Faculty of Management and Economics, Payam Noor University, Tehran, Iran.

10.30473/jier.2025.72982.1480

Abstract

The food industry in Iran is one of the vital and strategic sectors of the country's economy. This industry is important for various reasons, including ensuring food security, creating jobs, and creating added value. In this study, an attempt was made to examine barriers to entry, welfare costs of monopoly, and economies of scale in the food industry sector. The net entry method was used to examine barriers to entry, and the Harberger-Posner methods were used to measure welfare costs of monopoly, as well as the translog cost function to examine parametric economies of scale. For this purpose, raw data from the Statistics Center in the food industry with 14 active industries with four-digit ISIC codes during the years 2002 to 2021 were used. The research findings showed that the social costs of monopoly in the Posner method were much higher than the Harberger method. In addition, it was found that in the food industry, in addition to the high welfare costs of monopoly, the barriers to entry were high in most industries. In addition, this industry does not have economies of scale.

Keywords

Main Subjects

References

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Journal of Industrial Economics researches
Volume 8, Issue 29
September 2025
Pages 1-19

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History

  • Receive Date: 06 December 2024
  • Revise Date: 24 February 2025
  • Accept Date: 22 May 2025

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