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Some Deficiencies Often Found in the Textbook Analysis of the Monopolist Discriminating between Two Markets

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  • Reed, G V
  • Bates, J M

Abstract

Many textbooks incorrectly depict the relationships between marginal and average revenue curves for a price discriminating monopolist. Though linear demand curves in the two separate markets lead to a profit-maximizing monopolist having an aggregate marginal revenue curve which is linear, it is shown that the aggregate average revenue curve is not linear: furthermore, revenue typically exceeds that represented in the textbooks as the aggregate average revenue curve. Copyright 1990 by Scottish Economic Society.

Suggested Citation

  • Reed, G V & Bates, J M, 1990. "Some Deficiencies Often Found in the Textbook Analysis of the Monopolist Discriminating between Two Markets," Scottish Journal of Political Economy, Scottish Economic Society, vol. 37(4), pages 386-395, November.
    • Handle: RePEc:bla:scotjp:v:37:y:1990:i:4:p:386-95
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