# Questions tagged [price-theory]

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### Should Prices (or Price Indices) be modelled with deterministic trend?

I always face a dilemma on whether to assume prices to have a time trend or not while modelling. It is also partly a statistics problem. Let me explain. Assume I have time series, $y_t$ of price of a ...
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### What were the historical theories of price formation before demand-supply relationship was well understood?

Markets have existed for thousands of years. People must had ideas about where prices came from. Before the clear formulation of demand/supply-based theory of prices, what were the historical theories ...
53 views

### The envelope theorem and Viner's draftsman

In 1931 Viner wrote the paper "Cost Curves and Supply Curves" that famously contained the following mistake: Viner had asked the draftsman to draw the long run average cost curve so that it was ...
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. ...
47 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 ...
33 views

### Government efforts in tackling 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 ...
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### What combination will reduce consumption? Inferior/Normal good -- Rebate/ No Rebate? All of the above?

I am having trouble with this course question: The government wants to decrease consumption of alcohol, so they apply an alcohol tax. Which condition will lead to a decrease in consumption? a. ...
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The total market demand is given by the sum of the two destinations ($e$ and $f$) given to the product. Given these conditions: Demand: $d(p) = e(p) + f(p)$ where: $d(p) > 0$, $d'(p) \leq 0$; $e(... 0answers 39 views ### How can I represent this observation regarding options in a formula? By observing how an option's expiration P/L changes as its underlying asset price changes, we can discover the following system of equations:$\begin{cases}S_{Long} = C_{Long} + P_{Short} \\ S_{Short} ...
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' ...