Hotelling's "Ice cream dealers" with elastic demand

Tönu Puu ()
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Tönu Puu: Department of Economics, Umeå University, SE-90187 Umeå, Sweden

The Annals of Regional Science, 2002, vol. 36, issue 1, 17 pages

Abstract: This article reconsiders the Hotelling duopoly model of 1929, but under elastic demand, more precisely a linear demand function. The equilibrium state for identical firms is fully described, and the intervals of different regimes: independent monopolies, genuine duopoly competition, and price cutting wars, are specified in terms of one single compound parameter (maximum price, minus marginal production cost, divided by transportation cost).

JEL-codes: L13 R30 (search for similar items in EconPapers)
Date: 2002-04-09
Note: Received: October 2000/Accepted: August 2001
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Citations: View citations in EconPapers (6)

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