Abstract
This paper develops a theoretical analysis of steady state monopoly pricing in markets with a disparity between long‐ and short‐run demand elasticities, based on a separation between the long‐run demand schedule and the adjustment process that underlies actual demand levels. This sheds light, in a practical context, on the impact of the speed of adjustment and the firm's discount rate on its equilibrium markup; and on the measurement of realized monopoly power. An illustrative application of the analysis to existing empirical data supplements the theoretical presentation.
| Original language | English |
|---|---|
| Pages (from-to) | 681-694 |
| Number of pages | 14 |
| Journal | Economic Inquiry |
| Volume | 25 |
| Issue number | 4 |
| DOIs | |
| State | Published - 1 Jan 1987 |
ASJC Scopus subject areas
- Business, Management and Accounting (all)
- Economics and Econometrics