The Spatially Defined Price Discriminating Monopolist

John Hartwick

Working Paper from Economics Department, Queen's University

Abstract: Hoover (1937) developed a model where he showed a profit-maximizing monopolist selling in a spatially-defined market would charge different mill prices to different spatially-defined consumers. In particular, the mill price to a consumer is a decreasing function of the distance that consumer is from the plant. This note shows that the proposition depends on the constant marginal cost function used by Hoover and that "non absorption of freight" is an equally plausible outcome of profit maximization.

Pages: 11
Date: 1973
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Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:110

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