The Incentive of a Monopolist to Provide All Goods
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.
|Date of creation:||Jul 1995|
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- 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.
- Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
- 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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