Discussion Papers of Business and Economics
Department of Business and Economics, University of Southern Denmark
Nonprofit and profit companies in monopolistic competition
Abstract: A homogenous goods market with nonprofit and profit
companies engaged in monopolistic competition is proposed. In a short run
equilibrium, entrance of more companies of both types increases consumer
surplus and reduces company profit. However, nonprofit companies under a
long run zero profit constraint will act inefficiently and have higher
marginal costs than profit companies. From this follows that more funds for
donations to nonprofit companies reduce the welfare to be gained on the
market. Depending on the size of donations, nonprofit companies may have
higher, the same or lower (quality) output than profit companies.
Keywords: Nonprofit; Market structure; Monopolistic competition; Efficiency; Funding; Donations; Grants; Welfare; (follow links to similar papers)
JEL-Codes: I31; I38; L10; L13; L21; L25; L31; L33; L38; (follow links to similar papers)
23 pages, January 1, 2011
Before downloading any of the electronic versions below
you should read our statement on
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
Questions (including download problems) about the papers in this series should be directed to Lene Holbęk ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Design by Joachim Ekebom