Markets and Product Variety Management
Does product variety need managing? Even a person skeptical of efficient market theories and other articles of faith in the perfection of markets, will find himself asking two questions when he contemplates this question: If there is too much or too little product variety, why isn’t the market adjusting it? And if the market is tolerating it, in what sense is there really a mismatch? The main purpose of this paper is to answer these two questions, with special emphasis on the role of incomplete information.
KeywordsFixed Cost Demand Elasticity Virtual Space Potential Entrant Entry Decision
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