[OPE-L:5476] Re: Re: Counteracting factors

From: nicola taylor (n.taylor@student.murdoch.edu.au)
Date: Wed May 02 2001 - 01:55:49 EDT

One question Jurriaan:

> Further Marx doesn't discuss how, in inflationary times or under
> monopolistic conditions, businesses can simply raise their output prices to
> offset declining returns.

I don't follow this; if you don't mind can you explain it to me.  Surely,
monopolistic firms *always* operate on the elastic part of the demand curve
- therefore, total revenue could not be increased by raising prices... The
opposite holds true.  It is impossible for the monopolistic firm to set
*any* old price, at least if we assume they are profit maximisers.  Am I
wrong about this?  


Nicola Mostyn (Taylor)
Faculty of Economics
Murdoch University
Telephone: 61-8-9385 1130

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