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A Note on the Limits to Monopoly Pricing

Author

Listed:
  • Xavier Méra

    (GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - AGROCAMPUS OUEST - Institut National de l'Horticulture et du Paysage)

Abstract

Ludwig von Mises and Murray Rothbard tended to emphasize the same requirement for a monopoly price to emerge, as far as the demand schedule for the monopolized good is concerned, in the long run and in the immediate run. This is problematic because, as this paper explains, their criterion of a seller or a cartel of sellers facing an " inelastic demand " above the " competitive price " (Mises) or the " free-market price " (Rothbard) is only required in the immediate run. This has consequences in regard to the question of the limits to monopoly pricing. The inelasticity of demand criterion of both authors left less room for monopoly prices in their theoretical constructs of a hampered market economy than there really is. If one wants to spare the bulk of consumers from the effects of factor misallocation, refraining from granting monopolistic privileges becomes even more urgent than what both authors suggested.

Suggested Citation

  • Xavier Méra, 2015. "A Note on the Limits to Monopoly Pricing," Post-Print halshs-01182289, HAL.
    • Handle: RePEc:hal:journl:halshs-01182289
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01182289
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    File URL: https://shs.hal.science/halshs-01182289/document
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    References listed on IDEAS

    as
    1. Xavier Méra, 2010. "Factor Prices under Monopoly for Their Products," Post-Print halshs-00537669, HAL.
    2. Salerno, Joseph T, 1994. "Ludwig von Mises's Monetary Theory in Light of Modern Monetary Thought," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 8(1), pages 71-115.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    monopoly price; interventionism; elasticity of demand; economies of scale; perfect competition; monopolistic competition; price theory; Austrian microeconomics;
    All these keywords.

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