The Moral of Price Discrimination

Joan Robinson

Chapter Chapter 16 in The Economics of Imperfect Competition, 1969, pp 203-208 from Palgrave Macmillan

Abstract: Abstract IT is now possible to inquire how far price discrimination is harmful or advantageous to the customers of the monopolist and to society as a whole. First of all, it is clear, since average revenue is greater under price discrimination than under simple monopoly, that there may be cases in which no output would be produced at all if price discrimination were not possible.1 If the average cost curve of a certain product lay above the demand curve for it throughout its length no profit could be made by producing it under any one-price system. But if the average cost curve, though above the demand curve, lay at some point below the average revenue curve under price discrimination, a profit could be made and some output would be produced provided that discrimination was possible.2 It may happen, for instance, that a railway would not be built, or a country doctor would not set up in practice, if discrimination were forbidden. It is clearly desirable that price discrimination should be permitted in such cases, for the average revenue of the monopolist cannot be greater than average utility to the consumers.3 average revenue is greater than average cost, average utility will also be greater, and the investment will lead to a gain to society.

Keywords: Marginal Cost; Demand Curve; Average Cost; Price Discrimination; Imperfect Competition (search for similar items in EconPapers)
Date: 1969
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-15320-6_17

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349153206

DOI: 10.1007/978-1-349-15320-6_17

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().