| Sumario: | In order to examine the effects of uniform pricing compared to mill pricing for a firm serving a fixed market area, the writers present an analysis of profit, price, output, and welfare under mill and uniform pricing in a monopolistic spatial market with nonlinear demand, a general consumer distribution function, and a general transportation cost function. They demonstrate that if demand is convex (concave), then the optimal uniform price less the average unit transportation cost is lower (higher) than the optimal mill price, output under uniform pricing is lower (higher) than output under mill pricing, and welfare under uniform pricing is lower (higher) than welfare under mill pricing, given other respective conditions are satisfied.
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