Monopolistic Competition

  • Luis Corchón
Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 442)


General features of Monopolistically Competitive markets. The model of a representative consumer: Are average costs decreasing in the optimum? (Proposition 4.1). The effect on social welfare of an increase in the output or the number of firms in equilibrium (Propositions 4.2–3). A model with a representative consumer and the Large Group assumption: The relationship between optimal and equilibrium qualities (Proposition 4.4) and output (Proposition 4.5). The horizontal differentiation model: The model of the circular city (Salop). Existence of an equilibrium (Proposition 4.6). The convergence of Monopolistic Competition to Perfect Competition in large economies (Proposition 4.7). Appendix: Existence of optimal and equilibrium allocations (Propositions 4.8–9).


Equilibrium Price Profit Maximization Equilibrium Output Representative Consumer Welfare Maximization 
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Copyright information

© Springer-Verlag Berlin Heidelberg 1996

Authors and Affiliations

  • Luis Corchón
    • 1
  1. 1.Dept. Fundamentos del Análisis Económico and Instituto Valenciano de Investigaciones EconómicasUniversity of AlicanteAlicanteSpain

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