Pricing Dynamics with Non-instantaneous Quantity Adjustment

John Hudson

Scottish Journal of Political Economy, 1993, vol. 40, issue 3, 272-82

Abstract: This paper examines price setting from the perspective of a firm maximizing discounted present profits dynamically over time subject to a constraint governing the growth of sales. Thus, unlike the static case, the long-run demand curve is only approached over time. Two separate issues are analyzed, firstly the pricing pattern of a new product as it approaches equilibrium. The approach path to equilibrium will be characterized by prices rising at a rate dependent upon the discount rate and the speed of quantity adjustment. Secondly, the problem of price adjustment following a cost change to a system already in equilibrium. Copyright 1993 by Scottish Economic Society.

Date: 1993
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:scotjp:v:40:y:1993:i:3:p:272-82

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0036-9292

Access Statistics for this article

Scottish Journal of Political Economy is currently edited by Tim Barmby, Andrew Hughes-Hallett and Campbell Leith

More articles in Scottish Journal of Political Economy from Scottish Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().