Trade, Firm Size, and Product Variety under Monopolistic Competition

F. J. Anderson

Canadian Journal of Economics, 1991, vol. 24, issue 1, 12-20

Abstract: Monopolistic competition is used to examine rationalization behavior in response to market integration. A particular second-order condition on demand functions for differentiated products must be satisfied to generate an increase in firm size with an associated decline in equilibrium price when market size increases. For identical products, the firm size increase is guaranteed. The number of firms increases less than it does in proportion to market size for identical products, but may increase more than in proportion to market size for differentiated products. The latter results implies that market integration need not lead to exit of firms.

Date: 1991
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://links.jstor.org/sici?sici=0008-4085%2819910 ... FSAPV%3E2.0.CO%3B2-B (text/html)
only available to JSTOR subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cje:issued:v:24:y:1991:i:1:p:12-20

Ordering information: This journal article can be ordered from
https://www.economic ... ionen/membership.php

Access Statistics for this article

Canadian Journal of Economics is currently edited by Zhiqi Chen

More articles in Canadian Journal of Economics from Canadian Economics Association Canadian Economics Association Prof. Werrner Antweiler, Treasurer UBC Sauder School of Business 2053 Main Mall Vancouver, BC, V6T 1Z2. Contact information at EDIRC.
Bibliographic data for series maintained by Prof. Werner Antweiler ().