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The price paragraph function (PAF) or demand curve is a model from the management economics and the The function shows, how the Marktnachfrage changes after a property as a function of the price. Their principal purpose consists of determining the profit-maximum price. Depending upon type of market different developments of the price paragraph function can be differentiated. For simplification a linear price paragraph function is usually accepted.

Offering enterprises do not know the price paragraph function of a market in the reality typically non it know thus exactly, how many units can set them off at which price at the market.

(Note: In the following diagrams the ordinate with the abscissa were exchanged. Since the sold quantity is dependent on the price with the price paragraph function, the quantity on the y axis and the price belong on the x axis. Accordingly the process of the function must be adapted.)

Prohibitivpreis

In this "“exchanged"” representation represents the intersection of the PAF with the y axis the Prohibitivpreis. That is the price, with which the first buyer is determined to buy the product. Thus the top price, which the manufacturing enterprise can require, if still commodity is to be set off

PAF in the homogeneous Polypol

In the homogeneous Polypol one proceeds from a demand decreasing with increasing price. Since for the individual offerer the price must be given as of the market and accepted therefore as constant, it (e.g. p = 50 EUR/Mengeneinheit) is constant. The Konstanz is justified by the presence of the perfect market.

The individual offerer does not have influence on the price of the property provided by him, since the number of the offerers is so small so largely and its sales volume that it cannot change the market price by its actions. The PAF runs for the single offerer therefore parallel to the quantity axle - the demand is thus perfectly price flexible.

PAF in the monopoly

Contrary to the enterprise in the perfect competition, which must accept a firm market price for its product, the monopolist can determine the selling price. The buyer reacts then with his demand. The market solution results over the Cournot point.

PAF in the oligopoly

In the case of oligopoly one proceeds from a simply broken price paragraph function.

PAF in the heterogeneous Polypol

In case of a heterogeneous Polypols one proceeds from one doubly broken price paragraph function (Gutenberg' price paragraph function). This is to attribute to the available imperfect market, by which the PAF has a special market condition. It is among other things typical in case of the Monopolisti competition.

It has three sections: The upper range is the range of the own akquisitorischen Potenzials (also monopolyistic range called), in which the offerer can behave like a monopolist. Within the lower range the akquisitorische Potenzial of the competition works.


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