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A markup rule refers to the pricing practice of a producer with market power, where a firm charges a fixed mark up over its marginal cost.〔Roger LeRoy Miller, ''Intermediate Microeconomics Theory Issues Applications, Third Edition'', New York: McGraw-Hill, Inc, 1982.〕〔Tirole, Jean, "The Theory of Industrial Organization", Cambridge, Massachusetts: The MIT Press, 1988.〕 ==Derivation of the markup rule== Mathematically, the markup rule can be derived for a firm with price-setting power by maximizing the following equation for "Economic Profit": : :where :Q = quantity sold, :P(Q) = inverse demand function, and thereby the Price at which Q can be sold given the existing Demand :C(Q) = Total (Economic) Cost of producing Q. : = Economic Profit Profit maximization means that the derivative of with respect to Q is set equal to 0. Profit of a firm is given by total revenue (price times quantity sold) minus total cost: : : where :Q = quantity sold, :P'(Q) = the partial derivative of the inverse demand function. :C'(Q) = Marginal Cost, or the partial derivative of Total Cost with respect to output. This yields: : or "Marginal Revenue" = "Marginal Cost". : By definition is the reciprocal of the price elasticity of demand (or ). Hence : This gives the markup rule: : or, letting be the reciprocal of the price elasticity of demand, : Thus a firm with market power chooses the quantity at which the demand price satisfies this rule. Since for a price setting firm this means that a firm with market power will charge a price above marginal cost and thus earn a monopoly rent. On the other hand, a competitive firm by definition faces a perfectly elastic demand, hence it believes which means that it sets price equal to marginal cost. The rule also implies that, absent menu costs, a firm with market power will never choose a point on the inelastic portion of its demand curve. 抄文引用元・出典: フリー百科事典『 ウィキペディア(Wikipedia)』 ■ウィキペディアで「Markup rule」の詳細全文を読む スポンサード リンク
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