Ramsey Pricing: A Simple Example of a Subordinate Commodity

6 Pages Posted: 13 Jan 2021

See all articles by Paolo Bertoletti

Paolo Bertoletti

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS)

Date Written: January 13, 2021

Abstract

We present preferences exhibiting a so-called subordinate good, namely a commodity that receives a negative price-cost margin according to Ramsey pricing. We also show that they deliver Ramsey quantities proportional to the efficient ones.

Keywords: D11; D43; D61

JEL Classification: Subordinate Commodity; Negative Price-Cost Margin; Ram- sey Pricing

Suggested Citation

Bertoletti, Paolo, Ramsey Pricing: A Simple Example of a Subordinate Commodity (January 13, 2021). University of Milan Bicocca Department of Economics, Management and Statistics Working Paper No. 459, Available at SSRN: https://ssrn.com/abstract=3765447

Paolo Bertoletti (Contact Author)

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

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