New study reveals simple pricing rules for monopolistic competition equilibria!
The article explores how companies compete when they offer different products and customers have different preferences. By using a method called Morishima elasticities of substitution, the researchers found that in certain cases, companies can set prices easily and find solutions quickly. This is especially true when customers' preferences can be grouped together. The study also suggests ways to apply these findings to trade and macroeconomics, where prices can vary based on quality or overall economic conditions.