Assessment of market power and determining market structure for various agricultural as well as industrial products have always been considered as important issues in microeconomics. Different market structures can have major effects on level of production as well as price of various products. This study was conducted to determine the market structure in fresh tomato and tomato paste in Khorasan province. The model, which was used to measure the market power of processors, was NEIO (New Emprical Industrial Organization) model. The results indicated that conjectural elasticities for fresh tomato and tomato paste markets were 0.55 and 0.1 respectively. This means that the processors have market power on either of the markets and therefore are able to exert effect on prices. Thus, it is recommended that the policy makers use some price as well as non-price policies to reduce market power of processors in a bid to more fairly distribute trade benefits among tomato producers and processors.
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