chapter  11
The Optimal Balance Between Economies of Scale and Variety of Products: An Illustrative Model (1974)
Pages 9

In conditions of monopolistic competition there is a number of indepen­ dent producers each producing its own particular brand or quality of a class of products which, while they are not exactly identical, are nevertheless partial substitutes for each other. A well-known problem in the economics of welfare then arises which can be expressed by asking the following two questions. First, is each producer producing the optimal output of his particular brand? Second, are the best number and assortment of brands being produced, or should there be more or less variety of products to meet the consumers’ needs?