Extensions of Amoroso-Robinson's Formula

Ernst Lykke Jensen
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Ernst Lykke Jensen: Institute of Theoretical Statistics Copenhagen School of Economics and Business Administration

Management Science, 1967, vol. 13, issue 9, 712-722

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.

Date: 1967
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:13:y:1967:i:9:p:712-722

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