Price-sensitive demand and market entry
Alexander Rasch and
No 165, DICE Discussion Papers from University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
This paper revisits the optimal entry decision in a differentiated product market where customer demand is price-sensitive and depends on a per-unit transport cost. We show that too few firms may enter for high entry cost and high transport cost compared to the socially optimal outcome.
Keywords: Circular city; Horizontal product differentiation; Market entry; Price-sensitive demand (search for similar items in EconPapers)
JEL-codes: L11 L13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ind and nep-tre
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Journal Article: Price-sensitive demand and market entry (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:dicedp:165
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