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Asymmetric price transmission (sometimes abbreviated as APT and informally called "rockets and feathers" , also known as asymmetric cost pass-through) refers to pricing phenomenon occurring when downstream prices react in a different manner to upstream price changes, depending on the characteristics of upstream prices or changes in those prices.
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 ...
In addition to the absolute pass-through that uses incremental values (i.e., $2 cost shock causing $1 increase in price yields a 50% pass-through rate), some researchers use pass-through elasticity, where the ratio is calculated based on percentage change of price and cost (for example, with elasticity of 0.5, a 2% increase in cost yields a 1% increase in price).
The transport economics rationale for implementing congestion pricing on roads, described as "one policy response to the problem of congestion", was summarized in testimony to the United States Congress Joint Economic Committee in 2003: "congestion is considered to arise from the mispricing of a good; namely, highway capacity at a specific ...
For example: to Information Technology (IT) specialists, managing demand is new technology to provide information; to operations managers, managing demand is controlling the flow onto highways; to economists, it is pricing the system to find equilibrium with capacity; to marketers, it is promoting innovative campaigns; and to many policymakers ...
In economics, a price mechanism refers to the way in which price determines the allocation of resources and influences the quantity supplied and the quantity demanded of goods and services. The price mechanism, part of a market system , functions in various ways to match up buyers and sellers: as an incentive, a signal, and a rationing system ...
[4] [5] Examples of pollution pricing schemes include the London low emission zone and the discontinued Ecopass in Milan. In some European countries there is a period-based charge for the use of motorways and expressways, based on a vignette or sticker attached to a vehicle, and in a few countries vignettes are required for the use of any road.
Base point pricing is the system of firms setting prices of their goods based on a base cost plus transportation costs to a given market. [1] Although some consider this a form of collusion between the selling firms (it lowers the ability of buying firms to gain a competitive advantage by location or private transportation), it is common practice in the steel and automotive industries.