G

MONOPOLY

97

receipts,  provided  that  an  addition  to  the
output  at  this  point  would  cause  marginal
costs  to  exceed  differential  receipts,  and  a
reduction  of  the  output  would  cause  differential ­
  receipts  to  exceed  marginal  costs.
By  marginal  costs  is  to  be  understood  the
addition  made  to  aggregate  costs  by  the
production  of  the  last  increment  ;  and  by
differential  receipts  is  to  be  understood  the
addition  made  to  the  aggregate  gross  receipts
by  the  sale  of  the  last  increment.  We  must
not  call  the  latter  “  marginal  receipts,”
because  that  term  might  mean  the  marginal
demand  price.  It  is  necessary  to  remark  that
there  may  be  outputs  other  than  that  yielding
the  greatest  monopoly  revenue  of  which
the  above  statement  holds.  Any  position  of
which  it  holds  may  be  called  a  position  of
monopoly  equilibrium.  When  there  is  more
than  one  position  of  monopoly  equilibrium,
so  defined,  the  monopolist  naturally  selects
that  one  which  yields  him  the  highest
monopoly  revenue,  provided  that  he  knows
of  its  existence.
Thus  far  we  have  taken  for  granted  that
the  commodity  can  be  sold  for  one  price  only,
but  as  we  shall  see  later  there  are  circumstances ­
  in  which  it  is  feasible  to  impose
differential  or  discriminative  charges.  How-