The Reason Analysis for the Four Major Mines Contrarian Expansion in Recent Period

DOI

10.2991/lemcs-15.2015.313How to use a DOI?

Keywords

Iron ore price; Contrarian expansion; Marginal cost; Marginal revenue; Monopoly competition

Abstract

The iron ore prices continue to fall, but the four major mines contrarian expand their yield, which worsens the unfavorable situation that includes the over-high import dependency of China's iron ore and the import source over-concentrated and increases the operating risks to relevant industry in China. This paper is based on the theory of economic monopoly competition equilibrium to analyze the causes of the four major mines contrarian expansion action, and then researches the new equilibrium point economic reason that because of the production cost reduction after the market has already attained the equilibrium situation. In the light of the moving trace about the curves of marginal cost and marginal revenue, this paper found a conclusion: if the costs reduce, the monopoly competition manufacturers will need to expand their output to maximize the profit. This conclusion is consistent with the fact of the high cost manufacturers are being squeezed out among the four major mines and provides the theoretical basis for the adjustment of the iron ore supply strategy in China.

Copyright

© 2015, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Lin Gu
AU  - Jingtao Li
PY  - 2015/07
DA  - 2015/07
TI  - The Reason Analysis for the Four Major Mines Contrarian Expansion in Recent Period
BT  - Proceedings of the International Conference on Logistics, Engineering, Management and Computer Science
PB  - Atlantis Press
SP  - 1573
EP  - 1576
SN  - 1951-6851
UR  - https://doi.org/10.2991/lemcs-15.2015.313
DO  - 10.2991/lemcs-15.2015.313
ID  - Gu2015/07
ER  -