Normal costs and demand effects in price setting: a study of retailing
View PDF Version
Redirect to publisher's version
(publisher's version.url.txt, 50 bytes)
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.
- market share
- demand growth