Abstract
The size of the firm relative to market demand is crucial to a determination of whether there exist sustainable monopoly prices. In the one product case the size of the firm is its minimum efficient scale. In the multiproduct case size is defined by a set of outputs at which cost complementarities are present. The analysis shows that when the size of the firm is sufficiently large, there exist anonymously equitable Aumann-Shapley prices. Further, at these prices natural monopoly is sustainable against rival entry. The Aumann-Shapley price are also shown to be quantity sustainable in the sense of Brock and Scheinkman.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 149-163 |
| Number of pages | 15 |
| Journal | Journal of Economic Theory |
| Volume | 34 |
| Issue number | 1 |
| DOIs | |
| State | Published - Oct 1984 |
Funding
at the European meetings of the Science Foundation under Grant Leonard Mirman and Wayne for very helpful suggestions. Panzar. and Willig [ 3 ] and Econometric Society. Pisa. 1983. The support 82-19 12 1 is gratefully acknowledged. I thank Shafer for very helpful discussions. I thank Any errors are, of course, my responsibility, Sharkey [ 191 for comprehensive overviews of the
ASJC Scopus subject areas
- Economics and Econometrics