Search results
Results from the WOW.Com Content Network
Complete discrimination: seller prices each unit at a different price, so that each user purchases up to the point where the user's marginal benefit equals the marginal cost of the item; Direct segmentation: seller conditions price on some attribute (e.g., age or gender) that directly segments the buyers;
Cost–benefit analysis (CBA), sometimes also called benefit–cost analysis, is a systematic approach to estimating the strengths and weaknesses of alternatives.It is used to determine options which provide the best approach to achieving benefits while preserving savings in, for example, transactions, activities, and functional business requirements. [1]
First, individuals are willing to pay the respective taxes for the quantity of public goods provided. Second, the cost of the public good is covered by the aggregate taxes. Therefore, the Lindahl pricing centers around the benefit principle, in which individuals are taxed based on their valuation of the benefit received from the good. This ...
Welfare economics is a field of economics that applies microeconomic techniques to evaluate the overall well-being (welfare) of a society. [1]The principles of welfare economics are often used to inform public economics, which focuses on the ways in which government intervention can improve social welfare.
Additional forms of price discrimination include bundling, intrapersonal price discrimination and purchase-history price discrimination. [45] A firm's ability to price discriminate effectively can improve their profitability and/or increase their customer base, but only if the conditions required for price discrimination are met.
Social exchange theory is a sociological and psychological theory that studies the social behavior in the interaction of two parties that implement a cost-benefit analysis to determine risks and benefits. The theory also involves economic relationships—the cost-benefit analysis occurs when each party has goods that the other parties value. [1]
The appropriate selection of a social discount rate is crucial for cost–benefit analysis, and has important implications for resource allocations. There is wide diversity in social discount rates, with developed nations typically applying a lower rate (3–7%) than developing nations (8–15%).
Cost-based pricing is applied through setting the price of a product or good based on its production and delivery cost with a certain target margin. This method shows an emphasis for cost recovery and profit maximisation which tends to result in lower prices in commodities and/or lower quality of goods. [3]