Horizontal product differentiation,prices and quantity selection of a multi-product monopolist |
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Authors: | Benjamin Bental Menahem Spiegel |
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Affiliation: | Technion, Haifa 32000, Israel;University of Haifa, Haifa 31999, Israel |
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Abstract: | A monopolist which serves a market in which tastes are uniformly spread along a circumference of a circle selects an optimal set of product varieties. The cost of installing an additional variety increases with the difference from the ‘main product’. It is shown that variety prices decrease and the degree of differentiation between any two varieties increases as products get more differentiated. |
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