Wholesale price discrimination and enforcement of regulation
Hiroshi Aiura
Abstract
Open-access reader
Hiroshi Aiura
Abstract
Open-access reader
The present paper studied third-degree price discrimination in wholesale markets and its welfare property when a monopolistic manufacturer sells his/her products to two retailers who have different qualities and costs of sales. Our results revealed that price discrimination within a certain extent increases social welfare under some conditions, which would support the soft enforcement of prohibiting price discrimination by a monopolistic wholesaler.
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The present paper studied third-degree price discrimination in wholesale markets and its welfare property when a monopolistic manufacturer sells his/her products to two retailers who have different qualities and costs of sales. Our results revealed that price discrimination within a certain extent increases social welfare under some conditions, which would support the soft enforcement of prohibiting price discrimination by a monopolistic wholesaler.
Key concepts: Monopolistic competition, Enforcement, Price discrimination, Welfare, Microeconomics, Social Welfare, Economics, Property (philosophy)