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Briefly explain the concept of Ramsey pricing.
written 3.5 years ago by gravatar for prajapatijaimin prajapatijaimin • 3.3k •   modified 3.5 years ago
economics and management
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written 3.5 years ago by gravatar for prajapatijaimin prajapatijaimin • 3.3k

Solution:

Ramsey Pricing:

  • If an enterprise has common costs, marginal cost pricing may not be feasible.
  • Ramsey pricing is the a second-best alternative that allows the firm to recover its cost while minimizing the adverse effects of allocative efficiency.
  • It applies to public utilities or regulation of natural monopolies, such …

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