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The Ramsey problem, or Ramsey pricing, or Ramsey–Boiteux pricing, is a second-best policy problem concerning what prices a public monopoly should charge for the various products it sells in order to maximize social welfare (the sum of producer and consumer surplus) while earning enough revenue to cover its fixed costs.
Frank Ramsey's social discount rate is calculated as follows: r = d + n g {\displaystyle r=d+ng} , where d {\displaystyle d} is time preference, n {\displaystyle n} is the elasticity of marginal utility of consumption and g {\displaystyle g} is the growth rate .
Frank P. Ramsey (1927) developed a theory for optimal commodity sales taxes in his article "A Contribution to the Theory of Taxation". The problem is closely linked to the problem of socially optimal monopolistic pricing when profits are constrained to be positive, known as the Ramsey problem. He was the first to make a significant contribution ...
"Fully Distributed Cost Pricing, Ramsey Pricing, and Shapley Value Pricing: A Simulated Welfare Analysis for the Telephone Exchange" (with D. Gabel), Review of Industrial Organization, 1997. "Innovations in Economic Measurement: Comments", Proceedings of the Joint Statistical Meetings of the American Statistical Association , Section on ...
Ramsey (given name), including a list of people with the given name Ramsey (surname) , including a list of people with the surname Baron de Ramsey , a title in the Peerage of the United Kingdom, including a list of the barons
Pricing is the process whereby a business sets and displays the price at which it will sell its products and services and may be part of the business's marketing plan.In setting prices, the business will take into account the price at which it could acquire the goods, the manufacturing cost, the marketplace, competition, market condition, brand, and quality of the product.
Pricing strategies and tactics vary from company to company, and also differ across countries, cultures, industries and over time, with the maturing of industries and markets and changes in wider economic conditions. [2] Pricing strategies determine the price companies set for their products. The price can be set to maximize profitability for ...
The Keynes–Ramsey rule is named after Frank P. Ramsey, who derived it in 1928, [3] and his mentor John Maynard Keynes, who provided an economic interpretation. [4] Mathematically, the Keynes–Ramsey rule is a necessary first-order condition for an optimal control problem, also known as an Euler–Lagrange equation. [5]