Publications
Publications
- November 1990 (Revised June 1993)
- HBS Case Collection
Price-Quantity Determination
Abstract
Examines the important economic considerations affecting a firm's price-quantity decision for a product. Begins with a discussion of the appropriate decision criterion. Next, it motivates the concept of a demand curve for a product and defines demand elasticity. Marginal analysis is used to establish the following necessary condition for optimal price and quantity: marginal revenue must equal marginal cost. Price-quantity determination in the presence of a resource constraint and competition is also discussed.
Keywords
Citation
Dhebar, Anirudh S. "Price-Quantity Determination." Harvard Business School Background Note 191-093, November 1990. (Revised June 1993.)