Income Distribution and Monopoly: Price and Quantity Patterns with Intra- and Inter-Class Income Dispersion
Posted: 30 Jun 2000
We analyze the direction of the co-movements of price and output in a monopolistic market when an expansive shock occurs. Price and quantity patterns are shown to depend on the consumers? income distribution. In particular, a low degree of income dispersion is associated with price and quantity reacting in opposite directions to demand shocks.
JEL Classification: D31, L12
Suggested Citation: Suggested Citation