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11 In contrast to marginal analysis, full-cost pricing is full-unit-cost pricing without regard to demand. Viewed from the usual theoretical framework, it could result in a price that maximizes profits only by accident, not by design. 12 Indeed, the profit rate may be computed as that which will yield a target rate of return on investment at ...
price theory--the analysis of why things cost what they do and of how prices function to coordinate economic activity. This book is organized into six sections.
Lecture Notes on Pricing. (Revised: July 2012) These lecture notes cover a number of topics related to strategic pricing. Some of these are topics already presented in 15.013, and some are new. The objective is to provide you with a pricing “toolbox,” i.e., a set of pricing techniques, each of which might apply in some situations but not in others.
This paper reviews topics in price theory such as rational choice, Walrasian equilibria, complete and incomplete markets, externalities and nonmarket goods, strategic pricing with complete and incomplete information, and some behavioral anomalies.
The two basic ingredients of the approach to cost-benefit analysis which is adopted in this chapter are therefore the ability to predict consequences (a model) and the willingness to evaluate them (an objective function).
5 gru 2023 · Principles of Economics is based on a solid pedagogical foundation. Each chapter builds on a case study and offers new facts and knowledge to extend the understanding of the current environment. The chapter ends with a summary of key terms, a brief summary of the contents, and assessments.
An online appendix provides an exposition of production decisions based on detailed cost curves. After reading and reviewing this chapter, you should be able to: Describe the four different views of market power. List the assumptions behind the traditional model of perfectly competitive markets.
