Chaotic Dynamics in the Agricultural Monopoly Model and Innovation
Chaotic Dynamics in the Agricultural Monopoly Model and Innovation

Author(s): Vesna Jablanović
Subject(s): Social Sciences
Published by: Udruženje ekonomista i menadžera Balkana
Keywords: Innovations; Agriculture; Monopoly
Summary/Abstract: Innovation reduces the agricultural monopolist’s marginal cost. This paper creates a simple chaotic agricultural monopoly model with some specific assumptions. Namely, using a simple nonlinear demand function, nonlinear marginal cost function, the profit-maximizing condition and cost-reducing innovation, it is demonstrated that an agricultural monopoly can show chaotic behavior. The basic aim of this paper is to create chaotic agricultural monopoly model that is capable of generating stable equilibrium, cycles, or chaos.

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