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The effect of size on prices

Authors
Publisher
Elsevier B.V.
Publication Date
Volume
13
Issue
4
Identifiers
DOI: 10.1016/0165-1765(83)90187-8

Abstract

Abstract We present here an analysis of the effects that the firm's size, in the sense of the quantity of its assets, has on the price charged per asset. We show that the larger the firm is, the higher the price it charges. Our argument is not based on the traditional monopoly power associated with size but rather on the ability to bear risk.

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