Gu, Yiquan; Wenzel, Tobias - 2007
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 …