Abstract
Traditional models of the firm all incorporate the objective of profit maximisation. Furthermore, these models stipulate that the price-output combination which satisfies this objective is identified by recourse to the rule that marginal cost should be equated with marginal revenue. Hence the traditional models of the firm can be seen to require accurate data on both cost and demand conditions for the purposes of price determination.
See also Curwen, Managerial Economics, ch. 4.
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Notes and References
See, for example, Hall and Hitch, Oxford Economic Papers (May 1939);
I. F. Pearce, Economica (May 1956); Kaplan, Dirlam and Lanzillotti, Pricing in Big Business;
R. F. Lanzillotti, American Economic Review (Dec 1958); R. B. Heflebower in Business Concentration and Price Policy; W. W. Haynes, Pricing Decisions in Small Business; B. Fog, Industrial Pricing Policies; G. J. Stigler and J. K. Kindahl, The Behaviour of Industrial Prices; and D. C. Hague, Pricing in Business.
See, for example, Stigler and Kindahl, The Behaviour of Industrial Prices; G. C. Means, American Economic Review (June 1972); and
G. J. Stigler and J. K. Kindahl, American Economic Review (Sep 1973).
Hall and Hitch, Oxford Economic Papers (May 1939).
Pearce, Economica (May 1956).
J. S. Earley, American Economic Review (Mar 1956).
Lanzillotti, American Economic Review (Dec 1958).
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© 1976 P. J. Curwen
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Curwen, P.J. (1976). Pricing Behaviour. In: The Theory of the Firm. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-15645-0_13
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DOI: https://doi.org/10.1007/978-1-349-15645-0_13
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