Questions tagged [price-theory]
The price-theory tag has no usage guidance.
37
questions
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27 views
In this price model, employment grows with higher wages. Makes no sense
Using a Sraffian price model we have that, $p=(1+r)(pA+wl)$ where w (nominal wage rate), r (average profit rate) are scalars; p (market prices), l (labor input coefficients) are vectors; A (producers' ...
1
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2answers
32 views
Why do non-binding price ceilings have no effect?
My question seems trivial but I have a particular issue I don't understand. If there's a price ceiling above the price equilibrium, the customers can still use the ceiling as leverage when negotiating,...
3
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4answers
185 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
3answers
89 views
Is the price-quantity diagram fundamentally wrong?
I have wondered about the following diagram:
which shows a relationship between Price (Preis) and quantity (Menge). The supply (Angebot) curve is rising with the amount; the demand (Nachfrage) is ...
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0answers
39 views
Chicago Price Theory Book Recomendation: Becker vs Friedman
Friedman's Price Theory
Becker's Economic Theory
I've heard good things about both these books. I wanted to get a good introduction to a distinctively "Chicago" styled price theory book. I can't ...
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1answer
58 views
What if price were a function of buyer's income?
If everyone's income were public information, would purely profit-seeking sellers benefit from charging different prices to people based on their different incomes? My intuition says yes because a ...
1
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2answers
33 views
Labor time and the exchange value (Marx). What about the quality of the raw materials?
Karl Marx writes in his book "capital", that the exchange value of a commodity is determined by the necessary average labor required to produce the commodity. The labor is measured in time.
Here's my ...
2
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0answers
20 views
Government efforts in tacking the food crisis
I am a student taking H2 economics at the 'A' levels. Recently, in one of our case study questions in one of the tutorials on the price mechanism and its applications, we covered the food crisis. As I ...
2
votes
1answer
109 views
Phenomenon of equal prices without price collusion
Some time ago, I came across a term describing a specific phenomenon observed in free markets. I'm now looking for this term.
When comparing prices of certain staples in some countries, one quickly ...
-1
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2answers
57 views
How much of an assets price change is due to speculators and functional buys/sellers
If (for example) a heavily traded asset like crude oil has a price move of x, how much of that is influenced by functional buyers/sellers and how much by speculators?
Let's say x is +100, there are 8 ...
3
votes
1answer
73 views
Why does bond price tend to 100?
For example: if a bond got a 1% coupon, and tomorrow is the maturity date, so tomorrow I will have 101.
So, in my opinion a bond price should tend to notional+coupon, because today I want this amount ...
5
votes
1answer
750 views
Simple model to predict oil prices
Back when Hugo Chavez was still alive (former leader of Venezuela), he said they made "simulations" to predict how much oil prices will increase if they retire the supply of oil they were giving to ...
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2answers
1k views
How to maximize revenue by changing price?
I run a SaaS and I have the following data from it:
Number of trials (A), number of subscribers (B), subscribe cost (C) and total revenue (D) for every type of service my SaaS provide.
If I increase (...
1
vote
1answer
415 views
Help with CES Utility Function exercise
I am attempting to solve the following CES Utility Function problem:
However, I am running into issues when I get to 3).
For 1) I have $K = \left(\frac{\omega p_1}{p_2}\right)^{\frac{1}{p+1}}$
...
2
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0answers
34 views
Currency Denominations Affecting Prices
My question regards how currency denominations might artificially affect prices. For example, a baseball game that determines a good pricing scheme for parking would be charging 7 dollars per person. ...
2
votes
1answer
151 views
Decision to make one side of a multisided platform the subsidy side
I'm reading Matchmakers: The New Economics of Multisided Platforms by economists David S. Evans and Richard Schmalensee.
They describe how businesses often make a rational choice to allow one side of ...
1
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1answer
171 views
How can 1 BTC gain value in USD if inflation is happening?
So, right now, 1 BTC (bitcoin) is worth ≈ 578.25 USD. But, with the inflation of the USD, how can 1 BTC still hold its value at 578.25? Why doesn't it decrease?
Let's set this example:
1 BTC = 1 USD....
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1answer
23 views
Best formula for price depending on amount [closed]
What is the best formula of price of the product depending on amount. I mean "best" in psychological, marketing, stock rotation, profit maximizing, etc sense (any of them or all together, if possible)....
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1answer
625 views
Price elasticity when relationship between sales, price and other factors is not linear
For commercial deployment, price elasticity is calculated through linear regression which assumes that there is a linear relationship between price and sales. I have a)price and b)social media ratings ...
0
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1answer
24 views
If petrol/gas prices were locked down, how would normal consumers and the producers be affected?
Hey economics stack exchange! Congrats on getting to beta! I wanted to ask a question that was running through my head on a road trip earlier today.
Let's say a magic fairy grants a person his wish, ...
2
votes
2answers
85 views
Pay What You Want Pricing; Micro Foundations
One of those things that makes intuitive sense to me, but not economic sense is the "pay what you want" (PWYW) scheme of pricing. When thinking of traditional micro theory, the effective price of a ...
2
votes
1answer
302 views
Change in price and income using the Slutsky equation
Quantity bought is given by
$$
q(m,p) = 0.02 m - 2 p
$$
where $q$ is number of bottles bought, $m$ is income and $p$ is price per bottle.
If income is $m = 7500$ and price is $p = 30$, the number of ...
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1answer
237 views
How to calculate price function from demand curve when marginal cost is given?
This example is in a oligopoly market with two firms. The demand curve is given and also two firms' MC is given. How would one calculate price function in this scenario?
I found the slope using the ...
2
votes
0answers
45 views
Are there any models which allow to calculate a discount?
I want to progressively calculate a discount based on the amount of product sold. Are there any models which allow to take into account different type of products and can calculate the discounts based ...
2
votes
1answer
42 views
Is there a term for an externality in which prices for a good go up due to consumers being subsidized to purchase or consume that good?
Is there a term for an externality in which prices for a good go up due to consumers being subsidized to purchase or consume that good?
So for example, let us say that the government covers part of ...
7
votes
2answers
967 views
What determines the outcome of a price war, and why isn't that outcome reached instantaneously?
Mary is making a hefty profit manufacturing and selling widgets. Jim has some money laying around and he is trying to figure out if he shouldn't start manufacturing some widgets too.
In this example ...
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1answer
25 views
Newly discovered (by mainstream investors) asset chart/theory
I was reading an article about bitcoin in which a description was given of a chart/theory related to investor hype when an investment is first discovered by the mainstream. I've been unable to locate ...
4
votes
1answer
68 views
How long are consumers willing to wait in order to find a bargain?
I have (what I believe to be) a microeconomics question that I'd like to explore:
How long are consumers willing to wait to find a bargain on an item they'd like to purchase?
I believe the ...
5
votes
1answer
75 views
Do assets without rental income streams appreciate relative to assets with rental income streams?
In his book "The Armchair Economist", economist Steve Landsburg critiques an op-ed concerning the relative value of stocks and real estate:
James K. Glassman wrote a piece in The New Republic to ...
3
votes
1answer
159 views
What are some books for pricing theory with heavy math?
What are some books for pricing theory with heavy math?
I've finish reading pricing theory by Hirshleifer and another by Lansburg but both are not math intense.
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1answer
42 views
Price distribution: Negative values?
In their equation (5), Kaplan and Menzio claim that the price distribution in their Burdett-Judd market is given by
$$ F(p, u) = \{u \cdot A_1 \left[1 - \left(1 - B_1(u)\right)\frac{(r-c)p}{(p-c)r}...
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2answers
34 views
Why do prices of consumer products seem to rise independent of their supply?
For example, in my country, the price of coconuts steadily rises, despite the fact that we still have plenty of coconuts. The same with vegetables.
Is this caused primarily by an increase in the cost ...
3
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2answers
104 views
What does economics say about “starting from” pricing?
I was wondering what economics says about what I would call the “starting from” pricing pattern in advertising. My first question would be whether there’s a more properly defined term for it.
It’s a ...
2
votes
1answer
407 views
Price difference of substitute goods when the supply increases?
In a competitive market, there are 3 types of goods: X, Y and money (m). X and Y are substitute goods, and the utility functions are quasi-linear with respect to money, i.e:
$$U(x,y,m) = u(x,y) + m$$
...
4
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3answers
385 views
Book Recommendation: Price Theory
Can someone please recommend a book or a chapter from a book which provides a good and clear explanation of price theory. How prices are determined what they reflect and how they serve as allocaters ...
2
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1answer
23 views
Setting prices in mobile telephony
Can someone please explain or provide some useful link on factors affecting setting prices of mobile telephony services?
5
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1answer
83 views
Are newspaper articles more liberal than their readership?
This question was posted on a forum (see here), and I thought it was interesting, especially in light of the recent spotlight on Matthew Gentzkow's work. So, I'm re-posting it here.
Some studies ...
