Spatial Price Theory of Imperfect CompetitionEconomic space is the distance that separates economic agents such as manufacturers and consumers. Distance naturally imposes costs on the economic agents, but it has long been a neglected element in orthodox economic theory, one thought to complicate the issue unnecessarily. However, the theoretical implications of assuming away spatial elements may be especially significant for pricing practices and hence for competition. This volume shows why and in what ways the concept of economic space is vital and thus needed to reform orthodox price theory. It negates the classical paradigm of perfect competition and calls for a spatial price theory of imperfect competition. Among Hiroshi Ohta's findings in spatial microeconomic theory are that unlimited entry of new firms into the market may not lower consumer prices and that increased labor productivity in a spatial economy may actually lower real wages. Researchers and students of economic geography and regional science and economics will find the author's careful analysis, equations, and illustrations valuable in understanding a decade of advances in spatial price theory and in exploring new theories of competition. |
Contents
Unconstrained versus Constrained Spatial Monopoly | 29 |
Two Alternative Systems of Constrained Spatial | 45 |
Impact of Freight on Monopoly Spatial Pricing | 61 |
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aggregate demand assumed Assumption basic demand buyers chapter CIF price concave constant consumer density consumer distribution consumer surplus convex cost of production Cournot competition decrease defined demand curve demand function derived discriminatory pricing distance economic space Effects of Spatial elasticity of demand entry Figure fixed costs FOB mill pricing follows free spatial demand freight rate given GO competition greater Greenhut and Ohta impact Imperfect Competition increase innovation input linear long-run Löschian competition lower m₁ marginal cost marginal revenue market point model of spatial monopolist monopoly pricing nonspatial optimal price output effects output q price intercept value price policy price schedule profit Proposition quantity Region II Regional Science requires result Section slope spatial competition spatial market demand spatial monopoly spatial price discrimination tangency Theorem tion transportation tx)dx types of spatial uniform price welfare x₁ yields
