Price and Quantity Patterns When the Consumers' Income is Uncertain

Corrado Benassi, Roberto Cellini and Alessandra Chirco ()

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: The paper shows that the co-movements of optimal price and output in a monopolistic market can be a case of spurious correlation, price and quantity variations being affect by the degree of uncertainty in the consumers' incomes. The pattern of price and quantity changes depends on the shape of the distribution function of the stochastic variable income of the consumers , as well as the size of the firm's costs.

Date: 1996-02
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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:248

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