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MILL PRICING AND SPATIAL PRICE DISCRIMINATION MONOPOLY PERFORMANCE AND LOCATION WITH SPATIAL RETAIL MARKETS *
Author(s) -
Claycombe Richard J.
Publication year - 1996
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.1467-9787.1996.tb01103.x
Subject(s) - monopoly , price discrimination , mill , space (punctuation) , point (geometry) , production (economics) , economics , microeconomics , location theory , econometrics , industrial organization , economic geography , geography , mathematics , computer science , geometry , archaeology , operating system
. Most of the monopoly spatial price discrimination literature explicitly assumes uniform population density over space. It also implicitly assumes that firms (plants) are spatially isolated from each other with production and retail points that coincide in location. While departures from these assumptions have been explored separately in the literature, it remains to examine performance and location when these assumptions are relaxed simultaneously. What emerges in this paper is a model where density functions approximate a pair of cities isolated from other cities. Each city has its own retail market, while the location of a single production or wholesale point is determined by characteristics of the two markets. Comparisons of mill pricing and spatial price discrimination found in the spatial monopoly literature can be interpreted as special cases of the more general framework provided here.