The Theory of Concentration Oligopsony

This paper originates the theory of buyer concentration for amain raw material input for a single processing industry. theoilgopsony concentration is obtained and subsequently decomposedinto several factors, affecting indirectly the industry's profitability.it is found that the leading firms' efficiencies hypothesis isreaffirmed due to variations associated with the marginalproductivity differentials. this finding is based on concentrationseparation approach rather than analyzing the cost-efficiency effect against market power effect from increasing concentration on theindustry's markup, provided by structural approach of minimumcost function.