THE MONOPOLY OF PRODUCER UNDER CONDITIONS OF CARTELIZED TRADE

In the paper we have analyzed the specific market configuration in whi ch the producer is a monopoly and the trade cartelizes through the lev el of trade margin. We have focused on three the most probable variant s of producer and trade behaviour formulating the pricing strategy as follows: 1) trade sets such margin tariffs as to maximize the volume o f margin, 2) trade sets such margin tariffs so that the volume of trad e margin would be equal to the profit volume + fixed costs of a produc er, 3) producer sets (recommends) such margin tariffs so that the volu me of trade margin and profit volume + fixed costs of a producer would be maximum considering that the volume would be divided between trade and producer proportionally. In all three model cases we have conside red that the rate of VAT is constant and the margin tariffs are variab le. Considering the mentioned market configuration and the variants of producer and trade behaviour we had derived at first the methodologic al procedure of solution which was applied at the simulated market. On the basis of theoretical analysis we have reached the following concl usions: a) In all the three model cases we have found that the amount of margin tariffs is a function of demand elasticity and this dependen ce is proportional indirectly. These interrelations were formulated ex plicitly. b) The least productive behaviour of all the market subjects is that one in which trade maximizes the volume of margin. c) The mos t productive behaviour is that one when the monopoly (producer) determ ines (recommends) the amount of margin tariffs on the basis of derived principles, i. e. the amount of trade margin is a function of demand elasticity.