Price dispersion leads to higher profits for lower-priced firms.
The article discusses how firms set prices based on consumer reservation prices, leading to price differences even with the same costs. Lower-priced firms make more profit in this scenario. As the number of firms increases, price differences also increase. The highest price is set by a monopoly, while the lowest price is close to the cost of production. Despite many firms, prices remain higher than production costs on average. The pricing pattern remains the same even when prices are set one after the other.