Ramsey pricing
Definition
Argument that if prices are to be increased, it is a good strategy to increase the markup on goods with the most inelastic demand, because consumers or users will buy them anyway. This rule is applicable also in taxation where some goods and services are to be taxed, but not where all are to be taxed. Proposed by Frank Ramsey, it is also called inverse elasticity rule.
Ramsey pricing is in the Economics, Politics, & Society subject.
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