Why should a firm choose to limit the size of its market area?

We study when a monopolistically-competitive firm may optimally choose to limit the size of its market. This may be the case when the cost of serving the market with geographically dispersed customers is increasing in size. We also investigate the incentives faced by a firm to limit the reach of its...

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Bibliographic Details

Main Authors:	Marco Alderighi, Claudio Piga
Format:	Default Preprint
Published:	2007
Subjects:	Other economics not elsewhere classified Monopolistic competition Transport costs Endogenous fixed costs Overlapping market areas Economics not elsewhere classified
Online Access:	https://hdl.handle.net/2134/4262
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