Löschian duopoly under heterogeneous cost conditions is examined to show that it is not equivalent, contra past findings, to spatial collusion. Moreover, within the confines of the assumed demand and cost conditions spatial collusion is shown to be superior to Loschian competition in terms of both (aggregate) consumer surplus and producer surplus, which implies a possible welfare gain from collusion. A general, if not the general, prices‐and‐welfare comparison of alternative pricing schema including collusive, Löschian, and optimal pricing is summarily presented in a table.
