Pricing schedule

Pricing schedule

A pricing schedule is a function that maps the quantity of a good purchased to the total price paid.

Types of pricing schedules

* Linear Pricing Schedule - A pricing schedule in which there is a fixed price per unit, such that where total price paid is represented by "T(q)", quantity is represented by "q" and price per unit is represented by a constant "p", T(q) = pq [ [http://economics.about.com/library/glossary/bldef-linear-pricing-schedule.htm Linear Pricing Schedule] ]
* Nonlinear Pricing Schedule - Nonlinear pricing is a pricing schedule in which quantity and total price are not mapped to each other in a strictly linear fashion [ [http://economics.about.com/cs/economicsglossary/g/nonlinear.htm Nonlinear Pricing] ]
** Affine Pricing - An affine pricing schedule consists of both a fixed cost and a cost per unit. Using the same notation as above, T(q) = k + pq, where k is a constant cost. [ [http://economics.about.com/cs/economicsglossary/g/affine_pricing.htm Affine Pricing] ]

References


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