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| Author: | Ungern-Sternberg, Th. von |
| Title: | Monopolistic competition on the pyramid |
| Journal: | Journal of Industrial Economics
1991 : JUN, VOL. 39:4, p. 355-368 |
| Index terms: | MONOPOLY COMPETITION MARKET STRUCTURE CORPORATE MODELS PRODUCTION COSTS EQUILIBRIUM ANALYSIS PROFIT |
| Language: | eng |
| Abstract: | A model of monopolistic competition is developed. It has a simple locational interpretation, and allows for multi-firm competition. It is shown that one of the major weaknesses of the standard "circular road" model is the fact that it allows only localized competition. This creates problems when one wishes to analyze problems of international trade, where one often has to work with firms with different production costs. One of the major advantages of the "pyramid" model is that one can easily compute the firms' equilibrium profits even when their production costs differ. |
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