Salop is a theoretical model in economics that describes how firms set prices in a market with imperfect competition. It was developed by economist Stephen Salop in 1979. The model illustrates how firms can maintain market power by setting prices above marginal cost, leading to a situation where consumers face a range of prices for similar products. In the Salop model, firms are arranged in a circular market, allowing for differentiation based on location and product characteristics. This setup helps explain how firms compete not only on price but also on other factors, such as quality and brand loyalty, influencing consumer choices and market dynamics.