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Questions tagged [price]

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5answers
74 views

Why do companies launch products at much higher prices, only to reduce the price drastically after a few months?

I see this to be a prevalent trend - companies too often launch products at much higher prices than they know is gonna lead to good sales numbers, only to reduce the price drastically after a few ...
-2
votes
0answers
18 views

Deducing price elasticity of demand without price and quantity

How can the answers for these 3 questions in the link be deduced if no information is given about the price and quantity? P and Q are required to work out PED, XPED and YED. So I don't quite get how ...
1
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1answer
25 views

Are monopolies always price makers?

I have the following True/False question: A single price-taking firm on the market is called a monopoly. As far as I know, a monopoly is a price maker not a price taker. That being said if it is a ...
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0answers
24 views

Is the relationship between cost and value typically logarithmic?

Consider the comparison of two new cars. One costs \$250k and the other \$25k. One would naturally expect the quality (value) of the \$250k car to be greater than the \$25k car but does economics have ...
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0answers
24 views

Microeconomic Theory and Utility/General Equilibrium

I am working on this problem and struggling... as in I don't even know where to begin. Please help! It would be greatly appreciated! (Reference: Mas-Collel et.al (1995, section 3E)) Let u : X → R be ...
0
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1answer
34 views

Which impact would have to introduce 15 times more soy in the worldwide prices of soy?

Soy is a commoditie and the main export of Argentina. It's said Argentina has 40 millions of hectareas of arable land and it produces food for 400 million persons and that potentially could make food ...
0
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1answer
25 views

Economics of disparity in wages and in 'financial quality of life'

I am seeking a quantitavely and logically satisfying answer to the question I will outline below. It could be in a form of a book/article reference and ideally have as little ideological bias as ...
0
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0answers
19 views

Average Return for Commodity

Suppose I have a function of a varying values represented by randomness. A stock or price of a commodity would be a good example. What is the average return for that stock on any given interval of ...
0
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1answer
35 views

Demand Curve Price not perfectly elastic

I'm trying to make the argument that our Sales go up when prices for all our Products are 30% off. Which I believe should be our new Regular Price. but our Demand Curve doesn't support this. Should I ...
2
votes
1answer
36 views

What's an example of a resource, raw material that has become scarce?

I'm interested in the elasticity price demand that predicts that as a resource becomes more scarce, it gets more expensive. Regarding oil price this isn't clear. Is there an example of a resource ...
0
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0answers
7 views

A single price function for two simultaneous transactions

I am focusing on a scenario where an entity $A$ sell a service 1 to entity $B$. Moreover $B$ also sell a service 2 to $A$. The utility function of $A$ : U(A)=price from B for service 1-price to ...
2
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0answers
14 views

How much precious metals prices come from their use as investement vs practical use

Some precious metal price come almost exclusively from their value as an investement, as gold, while some others like palladium or osmium have important uses in industries. But lately those metals ...
0
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2answers
53 views

Monthly price elasticity and possibility of using daily values

I am calculating the price elasticity as a starting point to find a theoretical optimal price that would maximize our revenue. I am looking at 2 years data and to use the price elasticity formula, I ...
1
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0answers
35 views

Walras's law in a Fisher market

Walras's law is stated for an exchange market: each agent comes to the market with a certain endowment of each commodity, a price-vector is determined, and the demand of each agent is the best bundle ...
0
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2answers
20 views

Is there a correlation between pharmaceutical prices and drug dealers?

Question: Is there a quantitative or some kind of correlation between the number of drug dealers in a certain region and the price of pharmaceutical drugs? This is for a case I'm working on, but I ...
1
vote
2answers
46 views

How are the price signals of stocks in the stock market centralized?

We can look up the price of a stock, like that of Google, and it gives a particular figure. I would like to know how the price signal is "centralized". What I mean is: if the trades happen between ...
0
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1answer
47 views

Flooding the real estate market with luxury homes: will average prices rise or fall?

If every middle class single-family detached home in a sprawling metropolitan area like Los Angeles were each replaced with two luxury condos over a short period, would average real estate prices rise ...
17
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9answers
10k views

Car prices haven't changed in 20 years, no inflation?

I notice that there seems to be little or no change in car prices over the last 20 years and they seem to be unaffected by inflation. For example, a Toyota Camry sold for about \$23,000 +/- \$2,000 (...
2
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1answer
138 views

The relationship between indirect utility and expenditure functions

I am trying to understand the fact that $e(p, v(p,y)) = y$. There is a proof in the text Advanced Microeconomic Theory (Jehle and Reny) that states the following: Because $u(·)$ is strictly ...
2
votes
1answer
100 views

Proof that utility is nonincreasing in prices

The following is a proof that the indirect utility function is nonincreasing in prices, but I can't understand the last step. How do they conclude that $v(p_1, y) \ge$ from the previous reasoning? ...
3
votes
1answer
94 views

Why CPI differs so much from consumption deflator?

Why are the two series so different for the US? Data is here: https://fred.stlouisfed.org/graph/?g=lqVJ and photo added below: Private consumption in GDP should include all items consumer by ...
1
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1answer
22 views

How are final stock prices arrived at?

'Everybody' knows that prices are generally governed by offer & demand, but I am wondering on the details of the stock exchange here. How are stock prices (the ones which are nicely listed every ...
1
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1answer
17 views

Supplier offers “Price Protection Tariff” w/o exit fees, and more expensive Variable Price tariff. Does that mean it is betting on the price falling?

My energy supplier offers two tariffs: The first is a "Price Protection tariff". It gives you a fixed per-kWh price for 12 months, and has no exit fees (23.28 cent) The other is a "Variable price ...
0
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1answer
50 views

Difference between the minimum selling price and the actual selling price

I'm actually wondering what the correct name for the difference between the minimum selling price and the actual selling price is? Let's say I'm having an product A. After all calculations(costs, ...
0
votes
1answer
86 views

Do Chinese tariffs on American goods make them more expensive to American consumers?

This CNN article seems to imply that Chinese tariffs on American goods will make them more expensive to American consumers. Is this true? I did think that tariffs by your own country on imported ...
0
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2answers
84 views

Understanding the law of supply

In high school, I've never really questioned the law of supply, taking it as a given. As I begin an introductory economics course in university, "relearning" the fundamentals of Economics, I realise ...
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0answers
27 views

Adaptation of new keynesian model

I'm looking for literature in new keynesian model adaptation to model price shocks. I'm aware of Blanchard, Olivier, and Jordi Gali. 2007. “The Macroeconomic Effects of Oil Shocks: Why Are the 2000s ...
4
votes
1answer
47 views

Production choices in Hayek's theory of information-bearing prices

As I understand the work of Hayek, he asserts that prices encapsulate the true societal worth of the item being sold by integrating the compound need for all of the ingredients and work which go into ...
1
vote
0answers
316 views

What are the (immediate) effects of changing a good's price on consumer and producer surplus?

Basically, I'm trying to understand why the total surplus is maximized at the equilibrium and what happens if the price isn't at the equilibrium. Say the price of a good is the equilibrium price. ...
11
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5answers
2k views

The supply and demand of Virtual Products

We know that the fundamental economic problem is scarce resources relative to unlimited wants. **Does this apply to apps and Ebooks?**They are essentially virtual products who have in theory have ...
1
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1answer
69 views

How to increase price gradually?

I sell so called "tokens" for so called Ether. I receive an arbitrary amount of Ether in a transaction. I sent back a calculated amount of tokens. I want the price of a token increase as more tokens ...
1
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0answers
18 views

Why did the internet price rise in the last 5 years in Germany?

5 years ago a casual internet connection with 10 Mbit and telephone connection cost about 20 € per month in Germany. Today, the chepest contract that I could find in Germany is an internet ...
1
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1answer
26 views

Prices on year by year basis

I want to know the cost of milk on a year by year basis, say for the last 10 or 20 years. similarly I may want to know price of other items also (petrol, rice, biryani, etc). I just need the average ...
0
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1answer
62 views

Did I calculate maximum price of machine correctly?

Problem: A firm wants to buy a machine for its factory. It will work for two years. During the first year it will yield 240 thousand roubles and during the second year it will yield 200 thousands ...
1
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1answer
2k views

How to calculate average buy price when you buy, sell and rebuy

I wanted to get my avaerage buy price for some stocks I bought and see if I made money. So far for just buying and then later selling I have been calculating the avaege buy price using this formula <...
1
vote
1answer
22 views

Why does a lack of pipelines cause Canadian crude oil to trade at a discount compared to US crude oil?

There is an ongoing political battle in Canada about the proposed expansion of the Kinder Morgan Trans Mountain pipeline. One argument in favour of the expansion that is repeated by just about every ...
3
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4answers
157 views

How to track costs and calculate price?

I run a large Massively Multiplayer Online (MMO) gaming community and one of the services we’ve try to provide to our members is crafting. One of the challenges of this has been determining the price ...
0
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1answer
15 views

Gold charts on different currencies

I have this two charts of gold prices for the last 60 days. One is in Dollars and the other in Euros. Why they are not an exact match?
2
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2answers
183 views

It's unclear how market equilibrium is reached in case of overproduction

Let's assume that there is disequilibrium, namely that $P=P_2$, thus $Q_s > Q_d$. In other words, there is overproduction. This is perfectly competitive market, so competition between producers ...
1
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1answer
79 views

relation between the demand function and the marginal utility function

Can one say that the demand curve equals the marginal utility function? I have one course where this is stated. However, the demand curve dan be derived from combining the utility function with the ...
2
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1answer
28 views

Measuring quantities for price indices?

I'm confused about how one acquires the data necessary to compute price indices--specifically, how one acquires quantity data. Suppose I wanted to compute the Laspeyres Index, defined as $\sum\...
1
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2answers
63 views

How does price fixing work if it requires an almost universal agreement?

From what I gather, price fixing works by getting all the relevant actors in a certain economic sector to agree to fix the price of the goods they sell at a certain, higher-than-normal price, so that ...
2
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0answers
22 views

Price Synchronization in the Calvo Model

In the paper Gorodnichenko, Sheremirov and Talavera (2014) the authors compute empirically the degree of price synchronization across different goods. In a nutshell their definition of synchronization ...
0
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1answer
21 views

What does pilot price mean in the context of marketing?

In my lecture slide, it is said to be one of the competition-based price determination. When I searched online, I was unable to find anything relevant.
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2answers
611 views

What Creates the Price in the First Place

I just wanted to know if price changes how much quantity is supplied or demanded then what creates the price in the first place? If you say that price affects supply and demand and supply and demand ...
0
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1answer
738 views

Why is there negative sign for income effect in slutsky equation? [closed]

Slutsky identity is given by: ∆x/∆p = (∆x/∆p)|substitution effect + (∆x/∆p)|income effect Now we know ∆m= x*∆p => ∆p=∆m/x Therefore, ∆x/∆p = (∆x/∆p)|substitution effect + (x*(∆x/∆m))|income effect But ...
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0answers
9 views

Modeling Asymmetric price adjustment (downward price inflexibility)

There is any way to model downward price inflexibility? Because the different models of sticky prices, don´t have more downward inflexibility than upward.
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1answer
35 views

Central Banks Currency being used as value keeping hypothesis

I recently came up with the idea that all the worlds currencies with central banks may be being used as a way to steal value from people who give value to them. And no, im not talking about inflation (...
4
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2answers
496 views

Including (demand) price elasticity in a price regression model

I am wondering how to include price elasticity (demand side) in a linear price regression model that is based on asuming price is the result of demand=supply. Constructing a price regression under ...
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0answers
240 views

Modelling prices to identify price outliers

I am currently trying to find 'Price Outliers' in a set of data. Given a set of product prices (within a product category, e.g. milk) I want to filter for prices that are suspicious - for example I ...