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- Title
EXTENSIONS OF AMOROSO-ROBINSON'S FORMULA.
- Authors
Jensen, Ernst Lykke
- Abstract
This paper deals with the problem of price-fixing from the standpoint of an individual firm in a heterogeneous market. The elementary Amoroso-Robinson formula is generalized within a deterministic as well as a probabilistic set-up. In the probabilistic case it is shown that the price-solution depends on the standard deviation of demand as a function of the price parameters. From the models considered it is, in particular, deduced that the optimum price is at a lower level than the corresponding deterministic price if the standard deviation is constant, but at a higher level if the coefficient of variation is constant.
- Subjects
PRICE fixing; MATHEMATICAL models; DISTRIBUTION (Probability theory); STANDARD deviations; ANALYSIS of variance; SIMULATION methods &; models; PREDATORY pricing; SCARCITY; INVENTORY shortages; HOLDING cost; PRICING; CORRUPTION in business enterprises
- Publication
Management Science, 1967, Vol 13, Issue 9, p712
- ISSN
0025-1909
- Publication type
Article
- DOI
10.1287/mnsc.13.9.712