Non-uniform Pricing, Output and Welfare under Monopoly

Michael Katz ()

The Review of Economic Studies, 1983, vol. 50, issue 1, 37-56

Abstract: A monopolist may earn greater profits by setting a nonuniform price schedule (one in which the price varies with the quantity purchased) than by charging a uniform price. In general, the profit maximizing non-uniform price schedule and the welfare maximizing schedule do not coincide. Thus, there may be scope for improving market performance through regulation. The paper considers a regulator who has limited information and authority. The issues addressed centre around the question of whether the level of total market output can be taken as a measure of market performance. Conditions under which welfare is a monotonic function of the level of total output are derived.

Date: 1983
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Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:50:y:1983:i:1:p:37-56.

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