Sunday, October 23, 2016

Optimization of p*q: price and quantity

When doing revenue optimization we need to take into account the price elasticity of demand. Not sure if this publisher has a good handle on that.

image

 

References

  1. George Bittlingmayer, “The Elasticity of Demand for Books, Resale Price Maintenance and the Lerner Index“,  Journal of Institutional and Theoretical Economics (JITE) / Zeitschrift für die gesamte Staatswissenschaft, Vol. 148, No. 4 (December 1992), pp. 588-606
  2. http://yetanothermathprogrammingconsultant.blogspot.com/2016/09/getting-rid-of-fly-ash_12.html: another example where we use a price elasticity to optimize a firm’s profit.