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| Paolo Bertoletti |
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| ''Monopolistic Marginal Cost Pricing'' |
| ( 2016, Vol. 36 No.3 ) |
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| It is usually argued that the monopolistic pricing distortion arises because "a monopoly can raise its price above marginal cost without losing all its clients" (Tirole, 1988). We discuss a simple well-behaved example in which: i) monopoly price gets as close as desired to marginal cost, and ii) nevertheless it is associated to a significant dead-weight welfare loss. |
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| Keywords: Monopoly Pricing, Consumer Preferences. |
JEL: D4 - Market Structure and Pricing: General
D1 - Household Behavior: General |
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| Manuscript Received : May 05 2016 | | Manuscript Accepted : Jul 17 2016 |
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