Scale Economies with Regard to Price Adjustment Costs and the Speed of Price Adjustment in Australian Manufacturing

According to the authors, the standard quadratic price adjustment cost function makes no allowance for firm
size or for scale economies. Incorporating quadratic price adjustment costs into the profit function, a firm’s speed of price adjustment is both shown to be a
positive/negative function of its size when firms have scale economies/diseconomies with regard to these costs and to be a negative function of market power.