Zacharias, Eleftherios - In: The Quarterly Review of Economics and Finance 49 (2009) 4, pp. 1225-1235
We show that the entry of a second firm in a horizontally differentiated market (ala Hotelling) may harm consumers as prices increase and consumer's surplus possibly decrease. We first derive the price and the consumer's surplus of a monopoly which is located at the center of the market. When a...