The Application of the Spatial Model of Monopolistic Competition in Market of Baked Goods

Fresh baked goods are one of the examples of fast-moving consumer goods. Consumers want to buy this type of good as close to their place of residence as possible and at a certain time, but at the same time they require the highest possible quality, i.e. the freshness of the given good (rolls, bread, etc.). Consumer choice by location is expressed in the spatial-differentiation model for monopolistic competition. The practical implications of the summary of factors influencing the production of baked goods in the Czech Republic is expressed in our analysis of the development of profits in individual groups of producers of fresh baked goods in the Czech Republic. The aim of this paper is to describe the ongoing changes in the structure of the baking industry in the Czech Republic caused by the rising costs of raw material input, growing consumer demand for quality and also fierce competition on the market for baked goods.