The problem: the effect of assuming discrete markets rather than a continuous market, 212. — I. A simplified case, 213. — Results as seller A lowers his price, 215. — II. The f.o.b. prices which the sellers will set, 218. — Hotelling's diagram, 218. — A more complicated version, 219. — "Normal" equilibrium, 223. — III. No reason for assuming that any equilibrium will be attained, 225. — Assuming that sellers do not take their rivals' prices as given, 226. — IV. Conclusions: here the precise pattern of traditional duopoly analysis is not obtained, 228; possible equilibrium at the bare level of marginal costs, 229; application to other forms of discontinuous product differentiation, 230.
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Gardner Ackley (1942) studied this question.
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