Minimum phase - Revision history

en>AnomieBOT: Dating maintenance tags: {{Unreferencedsection}} {{Dubious}}

2014-09-01T16:01:34Z

Dating maintenance tags: {{Unreferencedsection}} {{Dubious}}

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	~~{{Competition law}}~~		Hi! I am Dalton. Acting is without a doubt a thing that Now i'm totally addicted to. My asset is now in Vermont and I don't wish on changing it. I am a cashier. I'm not good at webdesign but your preferred retail stores want to check the best website: http://circuspartypanama.com<br><br>My website; [http://circuspartypanama.com clash of clans hack free download]
	~~A '''limit price''' (or '''limit pricing''')~~ is a ~~price, or [[pricing strategies\|pricing strategy]], where products are sold by~~ a ~~supplier at a price of which is lower than the average cost of production or at a price low enough to make in unprofitable for other players~~ to ~~enter the market~~.

	It is ~~used by [[monopoly\|monopolists]] to discourage entry into a [[market]], and is illegal~~ in ~~many countries.<ref>[[Paul Milgrom]]~~ and ~~[[Donald John Roberts\|John Roberts]], 1982. "Limit Pricing and Entry under Incomplete Information: An Equilibrium Analysis,"~~ '~~'Econometrica'', 50(2)~~. pp. ~~[http://levine.sscnet.ucla.edu/archive/refs4245.pdf 443-459.]</ref> The quantity produced by the incumbent firm to act as a deterrent to entry is usually larger than would be optimal for a monopolist,~~ but ~~might still produce higher [[economic profits]] than would be earned under [[perfect competition]].~~

	~~The problem with limit pricing as strategic behavior is that once the entrant has entered the market, the quantity used as a threat~~ to ~~deter entry is no longer~~ the ~~incumbent firm's [[~~best response]]. This means that for limit pricing to be an effective deterrent to entry, the threat must in some way be made credible. A way to achieve this is for the incumbent firm to constrain itself to produce a certain quantity whether entry occurs or not. An example of this would be if the firm signed a union contract to employ a certain (high) level of labor for a long period of time.<ref name="Carlton">Dennis W. Carlton and Jeffery M. Perloff, 2004. ''Modern Industrial Organization'', 4th edition, [http://~~www.lavoisier~~.~~fr/notice/frSWORK23A3RW32O.html Description.]~~<~~/ref~~> ~~Another example is to build excess production capacity as a commitment device.~~

	~~==Simple Example==~~
	~~In a simple case, suppose industry [[demand]] for good X at market price P is given by:~~

	~~<math>\mathsf{Q^D} = a - bP~~<~~/math~~>

	~~Suppose there are two potential producers of good X, Firm A, and Firm B. Firm A has no~~ [[fixed costs]] and constant [[marginal cost]] equal to <math> c > 0 </math>. Firm B also has no fixed costs, and has constant marginal cost equal to <math>gc</math>, where <math>g > 1</math> (so that Firm B's marginal cost is greater than Firm A's).

	~~Suppose Firm A acts as a monopolist. The profit-maximizing monopoly price charged by Firm A is then~~:

	~~<math>p^M = \frac{a + cb}{2b}<~~/~~math>~~

	~~Since Firm B will never sell below its marginal cost, as long as <math>p^M \le gc<~~/~~math>, Firm B will not enter the market when Firm A charges <math>p^M</math>~~. ~~That is, the market for good X is an effective monopoly if:~~

	~~<math>g \ge \frac{a + cb}{2cb}</math>~~

	~~Suppose, on the contrary, that:~~

	~~<math>g < \frac{a + cb}{2cb}</math>~~

	In this case, if Firm A charges <math>p^M</math>, Firm B has an incentive to enter the market, since it can sell a positive quantity of good X at a price above its marginal cost, and therefore make positive profits. In order to prevent Firm B from having an incentive to enter the market, Firm A must set its price no greater than <math>gc</math>. To maximize its profits subject to this constraint, Firm A sets price <math>p^L = gc</math> (the limit price).

	~~==References==~~
	~~{{reflist}}~~

	~~==See also==~~
	*[[list of ~~economics topics]]~~
	*[[Predatory pricing]]
	*[[Strategic entry deterrence]]

	~~[[Category:Monopoly (economics)]]~~
	~~[[Category:Pricing]]~~
	~~[[Category:Anti-competitive behaviour]]~~
	~~[[Category:Industrial organization]~~]

77.191.132.6: /* Maximum phase */

2013-05-01T16:20:44Z

Maximum phase

← Older revision		Revision as of 18:20, 1 May 2013
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	~~Hola~~. The ~~author's name~~ is ~~Eusebio~~ but ~~rather he never really cherished~~ that ~~name~~. ~~In his professional life he can~~ be a ~~people manager~~. ~~He's always loved living all~~ the ~~way through Guam~~ and he [http://~~browse~~.~~Deviantart~~.~~com~~/?q=~~delivers delivers~~] ~~everything that he needs~~ there. ~~To drive~~ is ~~one of those things he loves most. He~~'s ~~been working about his website for several time now~~. ~~Check understand it out here: http~~://~~prometeu~~.~~net~~<br><br>~~Check out my web-site; [http~~://~~prometeu~~.~~net hack clash~~ of ~~clans iphone~~]		{{Competition law}}
			A '''limit price''' (or '''limit pricing''') is a price, or [[pricing strategies\|pricing strategy]], where products are sold by a supplier at a price of which is lower than the average cost of production or at a price low enough to make in unprofitable for other players to enter the market.

			It is used by [[monopoly\|monopolists]] to discourage entry into a [[market]], and is illegal in many countries.<ref>[[Paul Milgrom]] and [[Donald John Roberts\|John Roberts]], 1982. "Limit Pricing and Entry under Incomplete Information: An Equilibrium Analysis," ''Econometrica'', 50(2). pp. [http://levine.sscnet.ucla.edu/archive/refs4245.pdf 443-459.]</ref> The quantity produced by the incumbent firm to act as a deterrent to entry is usually larger than would be optimal for a monopolist, but might still produce higher [[economic profits]] than would be earned under [[perfect competition]].

			The problem with limit pricing as strategic behavior is that once the entrant has entered the market, the quantity used as a threat to deter entry is no longer the incumbent firm's [[best response]]. This means that for limit pricing to be an effective deterrent to entry, the threat must in some way be made credible. A way to achieve this is for the incumbent firm to constrain itself to produce a certain quantity whether entry occurs or not. An example of this would be if the firm signed a union contract to employ a certain (high) level of labor for a long period of time.<ref name="Carlton">Dennis W. Carlton and Jeffery M. Perloff, 2004. ''Modern Industrial Organization'', 4th edition, [http://www.lavoisier.fr/notice/frSWORK23A3RW32O.html Description.]</ref> Another example is to build excess production capacity as a commitment device.

			==Simple Example==
			In a simple case, suppose industry [[demand]] for good X at market price P is given by:

			<math>\mathsf{Q^D} = a - bP</math>

			Suppose there are two potential producers of good X, Firm A, and Firm B. Firm A has no [[fixed costs]] and constant [[marginal cost]] equal to <math> c > 0 </math>. Firm B also has no fixed costs, and has constant marginal cost equal to <math>gc</math>, where <math>g > 1</math> (so that Firm B's marginal cost is greater than Firm A's).

			Suppose Firm A acts as a monopolist. The profit-maximizing monopoly price charged by Firm A is then:

			<math>p^M = \frac{a + cb}{2b}</math>

			Since Firm B will never sell below its marginal cost, as long as <math>p^M \le gc</math>, Firm B will not enter the market when Firm A charges <math>p^M</math>. That is, the market for good X is an effective monopoly if:

			<math>g \ge \frac{a + cb}{2cb}</math>

			Suppose, on the contrary, that:

			<math>g < \frac{a + cb}{2cb}</math>

			In this case, if Firm A charges <math>p^M</math>, Firm B has an incentive to enter the market, since it can sell a positive quantity of good X at a price above its marginal cost, and therefore make positive profits. In order to prevent Firm B from having an incentive to enter the market, Firm A must set its price no greater than <math>gc</math>. To maximize its profits subject to this constraint, Firm A sets price <math>p^L = gc</math> (the limit price).

			==References==
			{{reflist}}

			==See also==
			*[[list of economics topics]]
			*[[Predatory pricing]]
			*[[Strategic entry deterrence]]

			[[Category:Monopoly (economics)]]
			[[Category:Pricing]]
			[[Category:Anti-competitive behaviour]]
			[[Category:Industrial organization]]

en>SchreiberBike: Repairing links to disambiguation pages - You can help! - Inverse

2012-06-20T18:49:57Z

Repairing links to disambiguation pages - You can help! - Inverse

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Hola. The author's name is Eusebio but rather he never really cherished that name. In his professional life he can be a people manager. He's always loved living all the way through Guam and he [http://browse.Deviantart.com/?q=delivers delivers] everything that he needs there. To drive is one of those things he loves most. He's been working about his website for several time now. Check understand it out here: http://prometeu.net<br><br>Check out my web-site; [http://prometeu.net hack clash of clans iphone]