Price Variation in Spatial Oligopolies

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Abstract
The “geography of price” is being given renewed attention by geographers and economists. This paper examines spatial price variation in both unbounded (circular) and bounded (linear) one‐dimensional markets. Firms compete for consumers in the short run by adjusting price until the Bertrand equilibrium is reached in the market. While firms act as spatial oligopolists in specific market segments, the profit‐maximizing price of any given firm depends directly and indirectly upon the spatial‐economic properties (locations, marginal costs) of all other firms in the market.