Game Theoretic Oligopoly Enterprises’ Profit Model with Limited Productive Capacity
In this issue a problem of oligopoly enterprises’ profit evaluation is developed and solved. It is assumed that there are more than two field enterprises with different average costs and limited productive capacities. World potash industry was chosen as a test object. Initial model choice is based upon the potash field properties. Enterprises’ cost functions and field demand function were estimated using simple linear regression and open access data. Enterprises’ profit maximizing yields were defined using function maximum necessary and sufficient conditions. Then their values were corrected using enterprises’ productive capacities. After that average field potash unit price was estimated using demand function and potash enterprises’ optimal profits were calculated.