This thesis presents a microeconomic assessment of the marble industry in Egypt. It starts with an overview and analysis of the international marble industry, highlighting this industry as one of the oldest industries in the world. Historically, the industry moved from laborintensive to capital-intensive with the advent of technological advancement, including development of automated production tools like cranes and diamond cutting wires. In Egypt, during the past 20 years, market entry into the industry was high, due to the high profit margins achieved. In addition, there was (and still is) lack of effective government regulation. Currently, the marble industry in Egypt could be described as that of monopolistic competition, where products are highly differentiated and there are relatively small barriers to entry. However, barriers to entry are becoming more tangible as the needed capital investment increased sharply with the devaluation of the Egyptian Pound. In order to study the dynamics of the industry more thoroughly, a case study (Watany Marble) was examined from two microeconomic perspectives: (1) an investment appraisal using economic cost-benefit analysis leading towards NPV, IRR, ERR and ROI calculations; and (2) application of the theory of the firm to the case study using Cobb Douglas production, profit maximization, cost minimization and returns to scale calculations. Results yield a ROI of 12.24% using weightedaverage opportunity cost of capital considerations, a declining long-run average cost curve, and increasing returns to scale in production. Using isoquant-isocost analysis, the marginal rate of technical substitution between factors of production resulted in $ 1000 of capital corresponding to 7.5 units of labor. Future prospects for the industry is market segmentation, where value-driven and export-oriented firms will tend towards forming an oligopoly, whereas local-oriented, cost-driven firms with relatively low technology will tend towards operating under conditions of a monopolistic competition.
School of Business
MA in Economics
Date of Award
Online Submission Date
Committee Member 1
Committee Member 2
Committee Member 3
Library of Congress Subject Heading 1
Marble industry and trade
Library of Congress Subject Heading 2
Industrial organization (Economic theory)
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(2004).The Marble Industry in Egypt: A Microeconomic Analysis [Thesis, the American University in Cairo]. AUC Knowledge Fountain.
Kandil, Azza Ibrahim Hamed. The Marble Industry in Egypt: A Microeconomic Analysis. 2004. American University in Cairo, Thesis. AUC Knowledge Fountain.
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