In the spatial model of horizontal product differentiation, adding an extra store was found to be socially optimal provided n(n+1) < tN/4F, where n is number of stores, N is number of consumers, t is travel cost and F is fixed cost. It was also found that adding an extra store is profitable for the price discriminating monopolist provided n(n+1) < tN/4F. Taken together, these results imply the monopolist has
a. too few stores
b. can’t tell without knowing marginal costs
c. too many stores
d. exactly the optimal number of stores
