Knowledge that Transforms

I. Price behavior, 451.—II. Profit, price behavior, and cost efficiency, 452.—III. Mobility and long-run equilibrium, 453.—Conclusion, 454.

Static sales maximization and growth maximization seem to have an appeal because they capture both some features of managers ' be-

I. Introduction, 303.—II. Model and comparative static properties, 306.—III. The influence of market power on equilibrium per unit discretionary expenditures, 312.—IV. Concluding remarks, 314.—Mathematical appendix, 315.

I. The analytical framework, 691.—II. Capital intensity and aggregation, 695.—III. Regular consumption behavior, 700.—IV. Summary and conclusion, 703.

amines the behavior of a price-discriminating monopolist under un-certainty. The firm seeks to maximize its market value in (Sharpe-Lintner) asset market equilibrium by selecting appropriate output prices and capacity level. Meyer's analysis describes a firm that either sells one (or more) products in several distinct markets, or produces nontransferable products (e.g., electric power, telephone services) at different points in time. Without loss of generality this comment employs the former interpretation. Meyer derives two important conclusions with respect to a firm's optimal pricing policy. 1. The price charged each market segment under uncertainty differs from the certainty equivalent) price in a way that reflects the segment's riskiness. 2. Optimal prices for a set of market segments reflect demand covariances among the market segments. Unfortunately, a basic algebraic oversight leads Meyer to misinterpret market "risk. " Subject to this misunderstanding, the first conclusion above remains correct in spirit, but the second is entirely misleading. This comment correctly defines the market "risk " pertinent to a value-maximizing firm's pricing decision. THE MODEL Meyer's framework is briefly restated here. The firm manufac-tures one (or more) product(s) and sells it (them) in several markets simultaneously. 2 Each market has a demand schedule, Di = D i (Pi,ui) i = 1, , n, where ui is a stochastic element. Expected demand at any price is given by Di * (Pi) = E[Di(Phui)], 1. That is, all variables set to their expected values. 2. One of Meyer's constraint variables must be reinterpreted to apply to the case of intertemporal demand segments. This is not directly relevant to the issue discussed here.

Journal Article The Implications of Price Stabilization for the Short-Term Instability and Long-Term Level of LDCS' Export Earnings Get access D. T. Nguyen D. T. Nguyen University of Lancaster Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 93, Issue 1, February 1979, Pages 149–154, https://doi.org/10.2307/1882604 Published: 01 February 1979

I. Contract structure and risk bearing, 257.—II. Asymmetrical information, 263.—III. Unemployment compensation, labor-leisure preferences, and seniority, 266.—IV. Profit sharing as a cooperative game, 271.—V. Summary and conclusions, 273.—Technical appendix, 276.

Journal Article Economies of Scale and the Profitability of Marginal-Cost Pricing: Reply Get access John C. Panzar, John C. Panzar Bell Laboratories Search for other works by this author on: Oxford Academic Google Scholar Robert D. Willig Robert D. Willig Princeton University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 93, Issue 4, November 1979, Pages 743–744, https://doi.org/10.2307/1884483 Published: 01 November 1979

Journal Article Economies of Scale and the Profitability of Marginal-Cost Pricing: A Note Get access John T. Scott John T. Scott Dartmouth College Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 93, Issue 4, November 1979, Pages 741–742, https://doi.org/10.2307/1884482 Published: 01 November 1979

The stability analysis of a short-run market system under ran-dom disturbances was initiated by Turnovsky [1968]. Later on, Re-vankar [1971] observed that the selection of a Liapunov function is