This paper revisits the excess entry theorem in spatial models ue0 la Vickrey (1964) and Salop (1979) while relaxing the assumption of inelastic demand. Using a demand function with a constant demand elasticity, we show that the number of firms that enter a market decreases with the degree of demand elasticity.We find that the excess entry theorem does only hold when demand is sufficiently inelastic. Otherwise, there is insufficient entry. In the limiting case of unit elastic demand, the market is monopolized. We point out when and how a public policy can be desirable and broaden our results with a more general transportation cost function.
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机译:本文回顾了空间模型 ue0 la Vickrey(1964)和Salop(1979)中的多余进入定理,同时放宽了非弹性需求的假设。通过使用具有恒定需求弹性的需求函数,我们发现进入市场的公司数量随着需求弹性的程度而减少,我们发现只有当需求足够无弹性时,超额进入定理才成立。否则,条目将不足。在单位弹性需求的极限情况下,市场被垄断。我们指出何时以及如何可以采用公共政策,并通过更一般的运输成本函数扩大结果。
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