Change theme
Change theme

The Sale of Durable Goods by a Monopolist in a Stochastic Environment

Available as: PDF

This paper examines the sale of durable goods by a monopolist in a stochastic partil equilibrium setting. It analyzes the responses of prices and output to various types of shocks and notes the differences with non-durable goods and competitive markets. It shows that behavior in this model with constant marginal costs of production is in many respects similar to behavior under perfect competition with increasing marginal costs.

JEL Code(s): D, D4

DOI: https://doi.org/10.34989/swp-1998-18