OUTPUT PRICE, MARKUPS, AND PRODUCER SIZE

This paper examines how output prices and markups vary across the size distribution of producers, It uses unique plant-level data on physica l output, revenue, and input expenditures for six homogeneous U.S. man ufactured products, The results reveal that, for five of the six produ cts, output prices decline systematically with increases in plant size . In the most extreme case, corrugated boxes, the smallest producers h ave prices that average 20 percent above the mean price while the larg est producers average 10 percent below the mean. At the other extreme, the price dispersion for gasoline is small and unrelated to plant siz e. Plant-specific markups of price over marginal cost vary across the size distribution of producers for five of the products. In three case s they decline, in two cases they increase, and one product, gasoline, shows no systematic variation.