Production Cost Heterogeneity in a Circular-City Model
نویسندگان
چکیده
We derive the closed-form solution characterizing the equilibrium in a circular-city model with competing firms of heterogeneous production costs. Tractability issues in this setting are well known and have not been resolved in prior work. In this paper, the equilibrium solution illustrates effects of production costs on firms’ strategic decisions, their aggregate profit, and consumer surplus.
منابع مشابه
Production cost heterogeneity in the circular city model
We derive the closed-form solution that characterizes the equilibrium in the circular city model, when competing firms have heterogeneous production costs. Tractability issues in this setting are well-known and have not been resolved in prior work. In this paper, the equilibrium solution illustrates the effects of production costs on firms’ strategic decisions and profits and on consumer surplu...
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