Questions tagged [pricing]

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5
votes
2answers
67 views

Why do some businesses choose scarcity as their business model instead of raising the price to meet the demand?

Here are some examples of what I'm talking about: Mass events such as Burning Man, the Olympics, and the World Cup sell out tickets very quickly which forces fans to resort to scalping or using bots ...
3
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4answers
203 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 ...
1
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1answer
59 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 ...
0
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2answers
66 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 ...
0
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1answer
56 views

Problem finding Demand Function [closed]

I am analyzing pricing for a new streaming service for a school project. My thought is to calculate the demand function of a player in the same industry and then calculate the optimal price. I am a ...
0
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2answers
23 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 ...
0
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1answer
51 views

Why is the price of books set by the manufacturer rather than the distributor?

For almost all manufactured goods which the manufacturer doesn't sell directly to the end consumer, the manufacturer sells to a distributor, and the distributor is then free to resell the good to the ...
0
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1answer
55 views

What is the monotone hazard rate assumption used for?

I was reading this article on advance purchase discounts and pricing in which the author uses the monotone hazard rate assumption. Why does the author use it? The article is Advance-purchase ...
3
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0answers
43 views

How should I calculate bulk selling price for a small business?

Some friends of mine run a small business, in a small garage-like space, with a few employees, making and selling "plumbuses". The typical customer orders about 5 plumbuses at a time. When I heard ...
0
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1answer
70 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, ...
2
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1answer
77 views

Proof of DCF model by mathematical induction

I am confident with the concept of DCF. However, I wanted to check the following proof given that if investors hold a share in $ t $, sell it at $t+1$, receive dividend $\ D_{t+1} $ and the price at $...
1
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2answers
92 views

Economies of scale: when is it disadvantageous?

So, I watched a video on economies of scale. It makes sense to me but I'm wondering, is there a point where say doubling the production rate makes the product even more expensive? How can I figure out ...
4
votes
1answer
35 views

What's the name of this pairwise price-setting scheme?

Two siblings inherit equal shares of a house. To decide who gets to live in it, they each bid what they think the other half is worth. The person with the higher bid gets it, and pays the other ...
1
vote
1answer
80 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 ...
2
votes
1answer
110 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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0answers
21 views

Why do some prices contain a sequence of a digit repeated several times?

I know about the psychology behind prices that end in 9 or 99, but I'm starting to notice that some prices contain the same digit (not 9) repeated two, three or even four times. For example, in this ...
0
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1answer
16 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?
1
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1answer
61 views

Distance transported used to price goods in Marxism

A friend mentioned that in Marxism, the distance a good was transported was used to determine the price of said good. I can't find anything on the Internet to support this claim, although I might be ...
3
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1answer
74 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 ...
1
vote
1answer
36 views

Issues if insurance is not compulsory for population

So I remember this in my Econ 101 course thing.. eg. If all cars are legally required to be insured, insurers work off a population statistic to calculate cost of crashes/ individual issues (...
2
votes
2answers
108 views

What's the term for elastic pricing?

What I've called "elastic pricing", has a true economics name that I believe I once heard. Here's the notion: I walked into a gas station to buy a fountain drink. I only brought a dollar with me, but ...
2
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1answer
46 views

Data on average/typical retail markups

Can anybody provide a reliable source that gives data on retail markups? My end goal is to make a fairly high-level statement along the lines of "a typical retail markup (across all industries) is X%",...
0
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2answers
101 views

Why are prices considered the best information we could have?

We often talk about information as pricing being the best information or reflection of different aggregate pieces of information existing on markets. Why do we then also often hear that some prices do ...
0
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1answer
39 views

Locational Marginal Pricing when different prices and when the same?

I am kinda confused about this YouTube video. So the LMP with no constraints is the same in both nodes. For me it was the same because I used those offers from node 1 also in node 2 and we chose the ...
1
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0answers
67 views

The Saturn pricing model, did it work?

Has there been a post-mortem on the Saturn pricing model? For those who do not remember, in the 1990s GM sponsored a new car model, the Saturn, which featured "no haggle" pricing. The car would be ...
2
votes
1answer
162 views

Can an overall improvement in technology make the owners of one factor worse off?

In a closed two-factor economy, suppose there is a biased technological improvement that increases the productivity of both factors, but one more than the other. Can this reduce the aggregate returns (...
1
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0answers
74 views

Metric for evaluating sales with dynamic pricing

Suppose you have a sausage maker. He buys batches of ground meat, then makes and sells sausages. Suppose each batch of ground meat makes N sausages, and each batch has specific level of quality that ...
1
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1answer
83 views

Should the government regulate the price of bananas? [closed]

Diclaimer: This is not a homework question. Every word of it was written originally by me. Hypothetical Scenario Alice is shopping for groceries and thinks the current price of bananas at ...
4
votes
1answer
58 views

Why has Apple increased app store prices in the UK?

Apple have recently announced an increase in app store prices, ostensibly due to the weakening of the pound following the Brexit vote and its fallout. Why has apple done this when the marginal cost ...
7
votes
4answers
3k views

Why doesn't Barnes and Noble just lower its prices?

For my birthday, I wanted a cookbook. So I went to Barnes and Noble and selected it: $40. Before I got the register I checked it on Amazon: $20. I started price matching every single cookbook I ...
1
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1answer
4k views

How to derive an aggregate demand function (and optimal uniform price) from two demand functions?

If I have two demand functions $P_1=100-10X_1$ and $P_2=50-10X_2$ and $X_1=40$ and $X_2=60$ with $MC=10$ We have two consumer groups: 1 and 2, where 1 has a higher willingness to pay, and we have ...
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0answers
30 views

How to dynamically update/calculate the price if we have the following values?

Need to update/calculate the price, the given values are: Reserve (Stock) (higher the price can be lower) Cost (the higher, the price can be higher) Sales Speed (the higher, the price can be higher) ...
2
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1answer
167 views

Block pricing for different products

How is a block price decided when there are many products to be sold? For example the buffet in various restaurants or combos in McDonalds or KFC (like the bucket buddy). Can somebody point me to ...
4
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0answers
168 views

Dynamic demand model in many good competitive markets and price optimization

This is a question about demand models, price optimization, dynamic pricing, big data, online learning, so I will cross-post in other communities. $\mathbf{Background}$ I am interested in dynamic ...
1
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0answers
23 views

Where do economists look for reliable commodity prices for dairy products?

I would like to know the market commodity price of cream cheese. I know you can look up the price of gold in the Wall Street Journal. Where can I get info on dairy products like cream cheese?
1
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2answers
110 views

Market behavior when consumer must choose product before knowing price?

What forces influence the price in a market, wherein the consumer must choose a good before knowing the price, and afterwards only knows the price of the good purchased, not that of any competing ...
-1
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1answer
308 views

Finding an exchange rate and competitive equilibrium given an initial allocation and utility function [closed]

I am attempting to solve the following question. "Smith and Jones are stranded on a desert island. Each has in his possession some slices of ham (H) and cheese (C). Smith is a choosy eater and will ...
1
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1answer
1k views

What statistical techniques can be used for measuring price elasticity

I know that linear regression is used for calculating price elasticity. If my objective is to estimate the parameters of a causal relationship, can i use machine learning techniques like Random Forest ...
1
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0answers
57 views

How to model optimal market pricing?

I am interested in understanding how to mathematically model market interaction to optimize pricing strategy. In my model I have two kinds of knowledge: the market's order book and the price/volume ...
2
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2answers
1k views

How to estimate empirically a demand curve

Suppose I have a small business that sell ice creams. An Icecream cost 2$, and every day I have different values of sales. ...
2
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0answers
169 views

The pricing of complementary goods if one of them is purchased only once

Sorry for asking a homework question, however, I'll try to generalize it as much as possible for a future use. There are two complementary goods (A and B). B is produced under perfect competition, ...
2
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0answers
27 views

Are there some guidelines/strategies for deciding between showing a list price vs “call for price”?

I suppose as a buyer many have been on the receiving end of "call for price" price discrimination or one of its less unpleasantly sounding synonyms. Now it's generally known that the average Joe hates ...
2
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0answers
27 views

Becker Social Pricing and Lack of Smooth Demand

I was reading an article on Becker Social Pricing, where your demand for a good depends on other people's demand for the good. So basically this paper is meant to be a primer into explaining why some ...
4
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1answer
1k views

How does the Uber's pricing model work?

I'm working on a paper on the sharing economy, and in particular on its economic implications. I am aware of the surge pricing model that Uber adopts, and of how it works. But I'm wondering on what ...
3
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2answers
5k views

Effect of property tax on rent

Suppose the government puts a tax on all apartment owners (e.g. a certain percentage of the apartment value), whether or not the apartment is rented. Will this tax cause an increase in rent? From an ...
2
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1answer
207 views

Why did the price level of government consumption increase in the United States?

From The Penn World Tables (PWT7): Before 1970, the price levels of the three GDP components had been going in parallel. In the late 60s, the price level of government consumption went up (the Nixon ...
3
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2answers
1k views

Why doesn't Costco simply raise prices and nix the membership fee?

I know little about the field of economics. I realize this question may be too rudimentary for this forum but I am sure someone here can explain this. My question concerns Costco, which is a ...
1
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1answer
147 views

Approximating the socially-optimal price in a monopolist market

A monopoly firm has an incentive to increase the price and decrease the produced quantity in order to increase its revenues. But this decreases the social welfare. The government can intervene in ...
7
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3answers
152 views

Is there an economic analysis of how piracy allows a product to take a hegemonic position?

There's an interesting situation with the likes of Photoshop, where the software being pirated actually increases its market usage, and the software becomes the de facto standard, in part due to ...
0
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1answer
1k views

What is the correct way to calculate a selling price from margin and a cost?

There seems to be two formula to calculate a selling price. The first formula that I came upon would be ...