Normal costs and demand effects in price setting: a study of retailing
The study aims at contributing to the debate whether there are demand effects in models that seek to explain prices as mark-ups on costs. For costs it considers actual costs, normal costs and an intermediate model with a partial adjustment to the deviation of actual from normal costs. For demand effects it considers an effect on the price level of a change of demand, with an allowance for asymmetry between demand growth and demand decline. Tests and estimates are conducted on the basis of data from retailing.
|Keywords||demand effects, prices, retail trade|
|Persistent URL||dx.doi.org/10.1016/0014-2921(88)90057-8, hdl.handle.net/1765/9589|
Nooteboom, B., Kleijweg, A.J.M., & Thurik, A.R.. (1988). Normal costs and demand effects in price setting: a study of retailing. European Economic Review, 999–1011. doi:10.1016/0014-2921(88)90057-8