Bhaskar, V.; UK, Andrews KY16 9AL - EconWPA - 1996
We analyze the effects of a legally-binding price floor using Hotelling's model of locational competition. A moderate … price-floor destroys the maximal differentiation equilibrium of d'Aspremont et. al., by allowing firms to compete more … aggressively for market share. Minimum differentiation results, with lower equilibrium prices. A low price floor results in …