Econometrica: Apr 1965, Volume 33, Issue 2

A Mathematical Note on Entry, Exit, and Oligopoly

https://doi.org/0012-9682(196504)33:2<425:AMNOEE>2.0.CO;2-G
p. 425-433

Lester G. Telser

This note has two purposes. Its first is to analyze the effects on the demand for each member of a group of firms producing substitute goods when there is a change in the number offered for sale. This analysis is confined to linear demand relations. The second purpose is to apply the analysis to a situation in which a group of firms either collude or merge. For certain linear demand relations it is shown that mergers will not result in a reduction of variety because of demand conditions.

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