<p>It is a market where firms compete for the marginal consumer. </p>

<p>It’s an opposite of having fully separated market where two firms do not compete for marginal customer.</p>

<p>An example of covered market would be market for bus rides where the departures are scheduled at the exactly same time - so there is competition for the marginal customer. </p>

<p>Example of separated marked would be when bus companies all schedule different times of departure so they don’t compete for the marginal customer.</p>

CC BY-SA 4.0
2019-12-13T14:21:11.170Z
"*Example of separated marked would be when bus companies all schedule different times of departure so they don’t compete for the marginal customer.*" So it is the 17:15 bus home or death?
Giskard
CC BY-SA 4.0
2019-12-13T14:38:21.620Z
@Giskard I don’t get it, I see the word departure often being applied to public transport, am I using in wrong way somehow?
1muflon1
CC BY-SA 4.0
2019-12-13T15:05:35.313Z
Separated market: there is no competition for the marginal customer. Thus for every customer there is exactly one acceptable departure time? If I don't catch my bus, the next one is not good enough?
Giskard
CC BY-SA 4.0
2019-12-13T15:20:46.500Z
@Giskard oh I see what you mean. Well I don’t think the models want to imply that but if you have some duopoly situation with two busses if they departure at same time then they will interact like duopoly on covered market and if they have different departure times more like a monopoly where they don’t compete for marginal customer and hence markets will be separated. If you think of the consumers utility as a function of desired departure time then you can say this, or at least I seen this terminology been used this way in IO papers
1muflon1
CC BY-SA 4.0
2019-12-13T21:16:22.117Z
"If you think of the consumers utility as a function of desired departure time" which of course, is the correct way to think about it, as anyone who has ridden the bus would know.  There is a reason frequencies rise during peak hours, and it's not because consumers are indifferent to departure time.
heh
CC BY-SA 4.0
2019-12-13T14:06:18.663Z
2019-12-13T14:06:18.663Z
1muflon1
<p>I do Industrial Organization course, and I've seen the phrase "market is covered" several times in my lecture slides, however, I'm struggling to find the formal definition of "covered market" and the condition when it's true. Can you please help me with that?</p>

<mathematical-economics><industrial-organisation>
Definition of covered market
Andrey Gaidin
# Definition of covered market

(Asked by: username_0 on 2019-12-13)

I do Industrial Organization course, and I've seen the phrase "market is covered" several times in my lecture slides, however, I'm struggling to find the formal definition of "covered market" and the condition when it's true. Can you please help me with that?

**Tags:** mathematical-economics, industrial-organisation


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## 1 answers

### Answer by username_1 on 2019-12-13. Score: 1

It is a market where firms compete for the marginal consumer.

It’s an opposite of having fully separated market where two firms do not compete for marginal customer.

An example of covered market would be market for bus rides where the departures are scheduled at the exactly same time - so there is competition for the marginal customer.

Example of separated marked would be when bus companies all schedule different times of departure so they don’t compete for the marginal customer.

> **Comments:**
> **username_2**: "*Example of separated marked would be when bus companies all schedule different times of departure so they don’t compete for the marginal customer.*" So it is the 17:15 bus home or death?  
> **username_1**: @username_2 I don’t get it, I see the word departure often being applied to public transport, am I using in wrong way somehow?  
> **username_2**: Separated market: there is no competition for the marginal customer. Thus for every customer there is exactly one acceptable departure time? If I don't catch my bus, the next one is not good enough?  
> **username_1**: @username_2 oh I see what you mean. Well I don’t think the models want to imply that but if you have some duopoly situation with two busses if they departure at same time then they will interact like duopoly on covered market and if they have different departure times more like a monopoly where they don’t compete for marginal customer and hence markets will be separated. If you think of the consumers utility as a function of desired departure time then you can say this, or at least I seen this terminology been used this way in IO papers  
> **username_3**: "If you think of the consumers utility as a function of desired departure time" which of course, is the correct way to think about it, as anyone who has ridden the bus would know.  There is a reason frequencies rise during peak hours, and it's not because consumers are indifferent to departure time.  

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