Monopoly pricing (Q1804025)
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English | Monopoly pricing |
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Monopoly pricing (English)
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29 June 1993
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Monopoly pricing is examined in a general framework with an unknown population distribution of consumer characteristics, downward-sloping, multi-unit consumer demand, and increasing marginal cost. Reference point pricing is introduced and is shown to implement the profit-maximizing allocation. Using central limit theorem arguments, nonlinear pricing is shown to be approximately optimal for the monopolist as the number of consumers gets large.
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monopoly pricing
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reference point pricing
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central limit theorem
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nonlinear pricing
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