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Ramsey pricing: a simple example of a subordinate commodity

Paolo Bertoletti ()

No 459, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: We present preferences exhibiting a so-called subordinate good, namely a commodity that receives a negative price-cost margin according to Ramsey pricing. We also show that they deliver Ramsey quantities proportional to the efficient ones.

Keywords: Subordinate Commodity; Negative Price-Cost Margin; Ramsey Pricing (search for similar items in EconPapers)
JEL-codes: D11 D43 D61 (search for similar items in EconPapers)
Pages: 6
Date: 2021-01
New Economics Papers: this item is included in nep-ind
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