Robust lower bounds on monopoly profit with α -concave demand
Year: 2024
Type: article
Abstract: I extend Condorelli’s lower bound on monopoly profit from log-concave demand to a broader class of α -concave demand, with α = 0 corresponding to log-concavity and α = 1 to concavity. The monopoly profit is at least 1 ( 1 + α ) 1 / α of the area under the demand curve. I further derive upper bounds for consumer surplus and deadweight loss relative to monopoly profit and show all three bounds are sharp. • Extends Condorelli’s lower bound to α -concave demand. • Monopoly profit is at least 1 ( 1 + α ) 1 / α of the area under the demand curve. • Derives upper bounds for consumer surplus and deadweight loss. • All bounds are shown to be sharp with specific examples.
Source: Economics Letters
Author: Toan Le
Institution: The University of Melbourne
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $2,980
OpenAlex ID: W4403838410