It has often been argued that "artificial" limitations on durability1 tend to be associated with monopoly elements in an economy. A straightforward expression of this idea was given by Chamberlin (1957, p. 132): "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 be no repeat demand for his product. He has an interest then 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. As a heuristic argument, if unit production costs do not diminish with decreased durability (the case considered here), costs of production would be lower when price, rather than durability, is the instrument for maximizing revenue (because lower replacement expenditure is involved). Therefore, at least to the extent that durability can be varied without affecting unit production costs, a profit-maximizing monopolist would choose the maximum durability.2 The above argument turns out to depend on an implicit assumption of perfect capital markets. In particular, the argument is valid if producers of durable goods employ the same discount rate for their profit flow that is used by owners of durables in discounting their flow of rental income. When the discount rate of owners is above that of producers, the owners are relatively more sensitive to shifts in price and relatively less sensitive