The Incentive of a Multiproduct Monopolist to Provide All Goods
Posted: 22 Aug 1998
Date Written: July 1995
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.
JEL Classification: L1, D4
Suggested Citation: Suggested Citation