AN UNEQUAL SPATIAL STRUCTURE OF LOCATION AND PRICE WITH CONSUMER DENSITY

This paper incorporates the interdependent relationship of firms and t he increasing consumer density into a framework of spatial equilibrium analysis, and studies the location of firms and the price system on a plane market. As consumer density increases, symmetric equilibrium is established initially for the first- and the second-round entry of fi rms, but this equilibrium becomes unequal later for the third and the fourth rounds. This fact means that in spatial equilibrium even if all firms sell identical goods on a plane market, mill prices and market area sizes will differ.