|
EconStor >
Heinrich-Heine-Universität Düsseldorf >
Düsseldorf Institute for Competition Economics (DICE), University of Düsseldorf >
DICE Discussion Paper, Düsseldorf Institute for Competition Economics (DICE) >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/55139
|
| | |
| Title: | | Price-dependent demand in spatial models  |
| Authors: | | Gu, Yiquan Wenzel, Tobias |
| Issue Date: | | 2012 |
| Series/Report no.: | | DICE discussion paper 43 |
| Abstract: | | This paper introduces price-dependent individual demand into the circular city model of product differentiation. We show that for any finite number of firms, a unique symmetric price equilibrium exists provided that demand functions are not too convex. As in the case of unit demand, the number of firms under free entry decreases in the fixed cost of entry while increases in the transportation cost of consumers. However, this number is no longer always in excess of the socially optimal level. Insufficient entry occurs when the fixed and transportation costs are high. |
| Subjects: | | spatial models price-dependent demand horizontal product differentiation demand elasticity excess entry theorem |
| JEL: | | L11 L13 R1 |
| ISBN: | | 978-3-86304-042-0 |
| Document Type: | | Working Paper |
| Appears in Collections: | | DICE Discussion Paper, Düsseldorf Institute for Competition Economics (DICE)
|
| |
| | |
Download bibliographical data as:
BibTeX
|
| |
Share on:http://hdl.handle.net/10419/55139
|
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.
|