| Sumario: | It has often been argued that "artificial" limitations on durability tend to be associated with monopoly elements in an economy. The producer has to face the question of how durable to make his product. Evidently if he makes it too durable, as soon as people have bought one unit they will not need another for a substantial period during which there will he no repeat demand for his product. He has an interest in making it less durable so that people will come back that much sooner to buy another unit. On the other hand since a monopolistic producer is being considered, it is not clear why increases in price cannot serve equally as well as reductions in durability. Households are assumed to be both the owners and the users of durables, with firms monopolizing the sale of durables to households. The utility of each household depends on the flow of consumables and on the flow of services from the single type of durable good.
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