In the model of horizontal product differentiation, the optimal price to serve the market can be generally given asp(N,n), whereNis the number of consumer andnis the number of shops.The optimal price for non-competing shops can be given asp* = (V + c)/2, whereVis common valuation andcis marginal cost.Ifp* <p(N,n) then

a.

the monopolist has less than the socially efficient number of shops.

b.

the monopolist should only serve part of the market withnshops

c.

the monopolist should add another shop.

d.

the monopolist should serve the whole market withnshops.