The block metric and the law of markets |
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Authors: | B. Curtis Eaton Richard G. Lipsey |
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Affiliation: | Department of Economics, University of British Columbia, Vancouver, British Columbia V6T 1W5, Canada;Department of Economics, Queen''s University, Kingston, Ontario, K7L 3N6, Canada |
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Abstract: | The “Law of Markets” as originally stated by Fetter and amended by Hyson and Hyson is based on the assumption that the transportation of goods is along a line segment from firm to customer. In many situations the assumption that transportation is along a block-like network of roads is a better approximation of reality. In this paper we establish the “law of markets” appropriate to the block metric. We discover that with such a metric there exist significant discontinuities in a firm's demand functions and we argue that these discontinuities have important implications for the types of competitive strategies open to firms. |
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Keywords: | Author to whom correspondence should be addressed. |
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