Ramsey prices, average cost prices and price sustainability

Leonard J. Mirman; Yair Tauman; Israel Zang

doi:10.1016/0167-7187(86)90026-3

Ramsey prices, average cost prices and price sustainability

Leonard J. Mirman
, Yair Tauman
, Israel Zang

Economics

University of Illinois at Urbana-Champaign
Tel Aviv University

Research output: Contribution to journal › Article › peer-review

6 Scopus citations

Abstract

We study the relationship between sustainable and average cost prices in the multiproduct case. It is shown that for the case where costs are separable only average cost prices can be sustainable even if demands are interdependent. As for the non-separable cost case the notion of average cost prices is axiomatically defined as an extension of the average cost concept of the single product case. We then use this extension to derive necessary as well as sufficient conditions for the extended average cost prices to be sustainable.

Original language	English
Pages (from-to)	123-140
Number of pages	18
Journal	International Journal of Industrial Organization
Volume	4
Issue number	2
DOIs	https://doi.org/10.1016/0167-7187(86)90026-3
State	Published - Jun 1986

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10.1016/0167-7187(86)90026-3

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AB - We study the relationship between sustainable and average cost prices in the multiproduct case. It is shown that for the case where costs are separable only average cost prices can be sustainable even if demands are interdependent. As for the non-separable cost case the notion of average cost prices is axiomatically defined as an extension of the average cost concept of the single product case. We then use this extension to derive necessary as well as sufficient conditions for the extended average cost prices to be sustainable.

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DO - 10.1016/0167-7187(86)90026-3

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Ramsey prices, average cost prices and price sustainability

Abstract

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