Vertical Connections on the Construction Market

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Abstract

The specificity of construction as an economic activity and of the construction product (goods and services) determine the existence of a complex vertical chain of links, involving different actors, which they perform simultaneously the function of the buyer of the product from a previous participant and vendor product to the next participant. In practice, this means that in every unit of the vertical chain construction firm as a buyer of resources and services can be monopsony or oligopsony, on the other hand as the seller of the created product may be in the role of a monopoly or oligopoly on the market. The aim of the study is the analysis the model of a bilateral monopoly on the resource and product market, the conditions of equilibrium and the behavior of the construction firm at the entrance and the exit, taking into account the specificities of different segments of the construction market.

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