|
EconStor >
Friedrich-Alexander-Universität Erlangen-Nürnberg (FAU) >
Institut für Wirtschaftspolitik und Quantitative Wirtschaftsforschung (IWQW), Universität Erlangen-Nürnberg >
IWQW Discussion Paper Series, FAU Erlangen-Nürnberg >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/29564
|
| | |
| Title: | | Product variety, price elasticity of demand and fixed cost in spatial models  |
| Authors: | | Gu, Yiquan Wenzel, Tobias |
| Issue Date: | | 2009 |
| Series/Report no.: | | IWQW discussion paper series 03/2009 |
| Abstract: | | This paper explores the implications of price-dependent demand in spatial models of product differentiation. We introduce consumers with a quasi-linear utility function in the framework of the Salop (1979) model. We show that the so-called excess entry theorem relies critically on the assumption of completely inelastic demand. Our model is able to produce excessive, insufficient, or optimal product variety. A proof for the existence and uniqueness of symmetric equilibrium when price elasticity of demand is increasing in price is also provided. |
| Subjects: | | Demand elasticity Spatial models Excess entry theorem |
| JEL: | | L11 L13 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IWQW Discussion Paper Series, FAU Erlangen-Nürnberg
|
| |
| | |
Download bibliographical data as:
BibTeX
|
| |
Share on:http://hdl.handle.net/10419/29564
|
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.
|