MONOPOLY

103

been  admitted  with  advantage  into  the
principles  of  payment  for  certain  public  and
semi-public  services.  Doctors,  for  instance,
frequently  charge  patients  of  different  classes
on  different  scales.
Jt  now  remains  to  discuss  the  principle
applied  in  the  settlement  of  discriminative
charges,  when  they  are  possible.  It  is
exactly  the  same  as  the  principle  of  the
single  monopoly  charge,  but  its  application
is  more  complicated.  The  monopolist  tries
to  fix  the  two  or  more  prices  which  he  finds
practicable  at  such  levels  that  his  net  returns
are  maximised.  We  may  think  of  the
monopolist  as  dealing  in  two  markets.  In
each  market  he  fixes  the  price  which  will
be  the  most  profitable,  regardless  of  the
price  obtained  in  other  markets,  except  in
so  far  as  the  quantity  of  sales  in  both
markets  taken  together  must  be  considered
because  of  its  bearing  on  cost  of  production. ­
  It  will  be  instantly  realised  how
exceedingly  improbable  it  is  that  the
most  profitable  price  in  the  one  market
should  be  identical  with  the  most  profitable
price  in  the  other.  In  the  one  it  might
pay  to  sell  a  large  quantity  at  a  low  price,
whereas  in  the  other,  in  view  of  the  different
circumstances  of  the  community  served,  it