Tuesday 11
Industrial Organization
Damien Gaumont
› 12:00 - 12:30 (30min)
› 605
Optimal mark up pricing without market structure consideration
Gaumont Damien  1, *@  , Yassine Badra  1@  
1 : CRED  (TEPP)  -  Website
Université Paris II - Panthéon-Assas
21 RUE VALETTE -  France
* : Corresponding author

Following Lerner 1934 a huge literature has emerged on mark-up, defining the optimal price has been a fraction of the price elasticity of demand times marginal cost. In practice, the marginal cost is difficult to evaluate and the price elasticity of demand should be less than -1 for price to be positive. This paper proposes a simple method to determine the optimal price of goods that is suitable for price elasticity greater than -1. The method that is simple to implement on market where firm buys goods at a given price and sales it at another price.


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