A platform for research: civil engineering, architecture and urbanism
A platform for research: civil engineering, architecture and urbanism
Simple monopoly price theory in a spatial market
Abstract One of main conclusions drawn by prior studies is that in a spatial market, the shape of the demand function can fully determine whether one simple pricing policy is superior to another either on the basis of the firm’s preference or social desirability while there is one assumption that is generally stipulated, namely, that the fixed market area assumption under which the market area is exogenously determined and remains the same under alternative pricing policies. In order to fully understand the impact of a demand function, this paper attempts to reexamine the relative economic advantages between two simple spatial pricing policies in a world with variable market area, that is, the market area is endogenously determined the price charged. We show that the fixed market area assumption is valid only where demand is linear, but no longer holds where demand is nonlinear. Moreover, and more importantly, we show that in a world with variable market area, some conclusions drawn by prior studies on the relative economic benefits of two pricing policies cannot remain valid. The main conclusion of this paper is that even the relative economic benefits of two simple spatial pricing policies is concerned, the impact of economic space is significant.
Simple monopoly price theory in a spatial market
Abstract One of main conclusions drawn by prior studies is that in a spatial market, the shape of the demand function can fully determine whether one simple pricing policy is superior to another either on the basis of the firm’s preference or social desirability while there is one assumption that is generally stipulated, namely, that the fixed market area assumption under which the market area is exogenously determined and remains the same under alternative pricing policies. In order to fully understand the impact of a demand function, this paper attempts to reexamine the relative economic advantages between two simple spatial pricing policies in a world with variable market area, that is, the market area is endogenously determined the price charged. We show that the fixed market area assumption is valid only where demand is linear, but no longer holds where demand is nonlinear. Moreover, and more importantly, we show that in a world with variable market area, some conclusions drawn by prior studies on the relative economic benefits of two pricing policies cannot remain valid. The main conclusion of this paper is that even the relative economic benefits of two simple spatial pricing policies is concerned, the impact of economic space is significant.
Simple monopoly price theory in a spatial market
Hsu, Song-ken (author)
2006
Article (Journal)
English
Simple monopoly price theory in a spatial market
| Online Contents | 2006
Upstream monopoly, downsteam competition and spatial price discrimination
| Online Contents | 1994
Location and Pricing Decisions of a MultiStore Monopoly in a Spatial Market
| Online Contents | 2004
SPATIAL PRICING POLICIES RECONSIDERED: MONOPOLY PERFORMANCE AND LOCATION
| Online Contents | 2001