Alternative Markup Decision Rules And Their Profit Implications
Alternative Markup Decision Rules And Their Profit Implications
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This assumed marginal revenue (hereafter called quasi marginal revenue) is %=pr (l-^^)' °^ p MR^ = (k-2aq) (1 + (k-aq)/aq 7hich reduces to MR^ = k-3aq + (aq)^/(k-aq), The correct marginal revenue curve is MR^ = d TR^/dq = k-4aq. The quasi-optimal solution for the producer is obtained by equating MR* and MC . The producer's price will be p', he will sell q units, and retail price will be p' . The prices p' and p' fall below p and p respectively. Observe that the producer makes less profit (A'B'C..."D" versus an optimal value of ABCD), whereas the retailers' profit increases (from ABC 'D' to A'B' C' "D' ' ' ) .
- 13 - 5. Constant Percentage >larkup Pji'lclnp Versus Simple Marginalist Pricing At this point we want to examine why retailers might prefer to use constant percentage markup pricing over simple marginalist pricing in cases where they do not give equivalent results. Let tt* be the K maximum possible profit under marginalist pricing, and tt*' under con- stant percentage markup pricing.
What to read after Alternative Markup Decision Rules And Their Profit Implications?
You can find similar books in the "Read Also" column, or choose other free books by Philippe Naert to read onlineMoreLess
To quickly assess the difficulty of the text, read a short excerpt:
This assumed marginal revenue (hereafter called quasi marginal revenue) is %=pr (l-^^)' °^ p MR^ = (k-2aq) (1 + (k-aq)/aq 7hich reduces to MR^ = k-3aq + (aq)^/(k-aq), The correct marginal revenue curve is MR^ = d TR^/dq = k-4aq. The quasi-optimal solution for the producer is obtained by equating MR* and MC . The producer's price will be p', he will sell q units, and retail price will be p' . The prices p' and p' fall below p and p respectively. Observe that the producer makes less profit (A'B'C..."D" versus an optimal value of ABCD), whereas the retailers' profit increases (from ABC 'D' to A'B' C' "D' ' ' ) .
- 13 - 5. Constant Percentage >larkup Pji'lclnp Versus Simple Marginalist Pricing At this point we want to examine why retailers might prefer to use constant percentage markup pricing over simple marginalist pricing in cases where they do not give equivalent results. Let tt* be the K maximum possible profit under marginalist pricing, and tt*' under con- stant percentage markup pricing.
What to read after Alternative Markup Decision Rules And Their Profit Implications?
You can find similar books in the "Read Also" column, or choose other free books by Philippe Naert to read onlineMoreLess
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