Monopolistic price differentiation boosts welfare and consumer surplus, improving societal well-being.
The article shows that a company can increase overall welfare by charging different prices for different products, even if the total amount produced doesn't change. By adjusting prices based on costs, the company can lower average costs and benefit consumers. This challenges the idea that more output always means more welfare, suggesting that price indexes are a better measure of overall benefit. This could lead to a more positive view of how companies set prices.