1998 | OriginalPaper | Chapter
How Firms Decide Prices
Author : Frank Livesey
Published in: Applied Economics
Publisher: Macmillan Education UK
Included in: Professional Book Archive
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Firms’ objectives are the starting point of this chapter. It examines the relationship between costs and prices, for example by discussing price changes, price stickiness and the sensitivity of consumers to price changes. It then considers price differentiation, the pricing of new products and those in decline, as well as practices such as predatory pricing, discounting and pricing to distributors.