Introducing Nonlinear Pricing into Consumer Choice Theory
AbstractIntroducing nonlinear pricing into the teaching of consumer choice theory would provide an extension that introduces the student to a ubiquitous phenomenon and would enable the instructor to develop some interesting behavioral results. After distinguishing linear and nonlinear pricing, the authors derive the tariff, the consumer budget equation, and some behavioral implications for various nonlinear pricing policies. They show, among other things, that under some forms of nonlinear pricing, after a price rise people may buy more of a commodity or more of a commodity than would have been bought under linear pricing. They note some complications arising in the treatment of quantity discounts and premia.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal The Journal of Economic Education.
Volume (Year): 33 (2002)
Issue (Month): 2 (January)
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- Islam, Jamal & Mohajan, Haradhan & Moolio, Pahlaj, 2011.
"Output Maximization Subject to a Nonlinear Constraint,"
50676, University Library of Munich, Germany, revised 08 Nov 2011.
- Jamal NazrulIslam & Haradhan Kumar Mohajan & Pahlaj Moolio, 2011. "Output Maximization Subject to a Nonlinear Constraint," KASBIT Journal of Management & Social Science, Khadim Ali Shah Bukhari Institute of Technology (KASBIT), vol. 4, pages 116-128, December.
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