This paper analyzes price competition in the case of two firms operating under constant returns to scale with more than one production factor. Factors are chosen sequentially in a two-stage game implying a convex short term cost function in the second stage of the game. We show that the...

We propose a general model of oligopoly with firms relying on a two factor production function. In a first stage, firms choose a certain fixed factor level. In the second stage, firms compete on price, and adjust the variable factor to satisfy all the demand.When the factors are substitutable,...