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
* Nonlinear Pricing Schedule -
Nonlinear pricing
Nonlinear pricing is a broad term that covers any kind of price structure in which there is a nonlinear relationship between price and the quantity of goods. An example is affine pricing.
A nonlinear price schedule is a menu of different-sized bu ...
is a pricing schedule in which quantity and total price are not mapped to each other in a strictly linear fashion
** Affine Pricing - An
affine pricing
In economics, affine pricing is a situation where buying more than zero of a good gains a fixed benefit or cost, and each purchase after that gains a per-unit benefit or cost.
Calculation
Denoting ''T'' is the total price paid, ''q'' is the quant ...
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.
Affine Pricing
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References
Financial economics
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