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The Incentive of a Monopolist to Provide All Goods

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  • Nicholas Economides

Abstract

This note shows that a monopolist facing any linear demand system for n goods and no fixed costs will produce positive quantities of all goods as long as demand is positive for all goods when all are sold at marginal cost. This is in contrast with the traditional view that, in general, a multiproduct monopolist does not produce positive quantities of all goods even though there is positive demand for each of them when prices are equal to marginal cost.

Suggested Citation

  • Nicholas Economides, 1995. "The Incentive of a Monopolist to Provide All Goods," Working Papers 95-09, New York University, Leonard N. Stern School of Business, Department of Economics.
    • Handle: RePEc:ste:nystbu:95-09
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    File URL: http://raven.stern.nyu.edu/networks/95-09.pdf
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    References listed on IDEAS

    as
    1. Srinagesh, Padmanabhan & Bradburd, Ralph M, 1989. "Quality Distortion by a Discriminating Monopolist," American Economic Review, American Economic Association, vol. 79(1), pages 96-105, March.
    2. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    3. Donnenfeld, Shabtai & White, Lawrence J, 1990. "Quality Distortion by a Discriminating Monopolist: Comment," American Economic Review, American Economic Association, vol. 80(4), pages 941-945, September.
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    More about this item

    Keywords

    monopoly; linear demand;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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