A recent literature has provided empirical evidence that markups are increasing and are heterogeneous across firms. In standard monopolistic competition models, such heterogeneity implies inefficiency even in the presence of free entry. We enrich the standard model of monopolistic competition...

We construct a general equilibrium model with home production where consumers choose how to spend their off-market time using market consumption purchases. The time-intensities and productivities of different home production activities determine the degree to which variation in income and...