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Measuring profit margins is central to antitrust analysis, yet margins are often difficult to estimate using the data typically available in investigations. Conventional methods such as demand estimation or reliance on accounting cost data can be impractical or yield unreliable results in applied settings.
In a paper published by the ABA's Antitrust Source, Director Daniel Greenfield and Econic Partner Jeremy Sandford examine how a firm's incremental margin—as measured by prices and market share—can be used to infer economically relevant margins when firms sell across related markets or can reallocate production. Their analysis shows how pricing information and market shares can provide practical insight into market power without relying on complex estimation techniques.
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