| This study is motivated by the proposition that the objectives of the AWB Ltd have changed since semi-privatisation of the Australian Wheat Board under the Wheat Marketing Act, 1989. Conceptualising this change of objectives as a shift from revenue maximization to profit maximization, this study examines the impact of such a change on the pricing policies of a multi-market price-setting firm. More specifically, this paper investigates, using two hypothetical objective functions, a risk averse AWB’s price-setting behaviour in an “overseas” and a “domestic” market in response to recent wheat industry developments. In the analysis these developments manifest themselves as differing price elasticities, differing transport costs and uncertain demand functions,... |
