Production-location decision and free entry oligopoly

[[abstract]]This paper presents a simple oligopolistic model of location in which all firms in an imperfectly competitive industry are assumed to produce a homogeneous output and make Cournot conjectures about their rivals' input and location decisions. Within this framework, this paper points out that the key difference between oligopoly and monopoly is the following: in the case of monopoly, a positive shift in demand requires that a monopolist increase his output, but in the case of oligopoly, an increase in industry output may or may not increase output per firm because of the number of firms (at free entry equilibrium) is not constant. It is shown that in an oligopoly model of location that allows free entry, the demand condition plays an important role on the determination of industrial location.[[journaltype]]國