Premium
SPATIAL PERFECT COMPETITION: A UNIFORM DELIVERED PRICING MODEL
Author(s) -
Ohta Hiroshi,
Lin YanShu,
Naito Masa K.
Publication year - 2005
Publication title -
pacific economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.34
H-Index - 33
eISSN - 1468-0106
pISSN - 1361-374X
DOI - 10.1111/j.1468-0106.2005.00282.x
Subject(s) - monopolistic competition , economics , oligopoly , competition (biology) , perfect competition , microeconomics , yield (engineering) , scale (ratio) , price setting , monopoly , cournot competition , ecology , materials science , physics , quantum mechanics , metallurgy , biology
. Spatial competition is often probed in terms of spatial oligopoly and/or monopolistic competition in the literature. This paper considers spatial competition as a form of perfect competition, in the sense that the firms are assumed to be price‐takers located at the centre of a market area and practising uniform pricing. It shows that under scale economy competitive equilibria can occur, and may actually be observed in the form of international price differentials. Both a very high price and a very low price can yield conditions of competitive equilibrium in spatially or otherwise separate markets.