City Research Online

Abstract

We characterize the product line choice and pricing of a monopolist from the upper envelope of net marginal revenue curves to the individual product demand functions. The equilibrium product line constitutes those varieties yielding the highest upper envelope. In a generalized vertical differentiation framework, the equilibrium line is exactly the same as the first-best socially optimal line. These upper envelope and first-best optimal line findings extend to symmetric Cournot oligopoly.

Publication Type:	Article
Additional Information:	© 2015 . This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Publisher Keywords:	Product line design Product differentiation Second-degree price discrimination, Product line pricing, Cournot multi-product competition
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HF Commerce
Departments:	School of Policy & Global Affairs > Economics
SWORD Depositor:	Symplectic Administrator

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