This paper studies price and production competition between spatially distributed firms. Firms compete by choosing delivered prices, a pricing regime which is often observed for goods with high transportation costs. The model is a very general one: customers have price elastic demand and firms have increasing marginal production and transportation costs. To study this competitive situation, a non-cooperative game is proposed. Existence and general properties of the Nash price and production equilibrium are shown and sufficient conditions that guarantee the existence of a unique price-production-transportation equilibrium are presented. It is shown that the only pricing patterns that can result from equilibrium are basing point, monopoly or mill pricing. A convergent algorithm is shown and demonstrated with an example.