Introducing Nonlinear Pricing into Consumer Choice Theory


Publication: Journal of Economic Education

Volume: Volume 33, No. 2

Issue: Spring 2002

Pages: 166-179

Author(s): Joseph S. DeSalvo and Mobinul Huq

Address (Principal Author):Joseph S. DeSalvo
Department of Economics
University of South Florida
Tampa, FL 33620-5500
Phone: (813) 974-6388
Fax: (813) 974-6510

Internet Address (Principal Author):jdesalvo@coba.usf.edu

Title: Introducing Nonlinear Pricing into Consumer Choice Theory

Abstract: The authors derive the tariff, the consumer budget equation, and some behavioral implications for various nonlinear pricing policies. They show that under some forms of nonlinear pricing, after a price rise people may buy more of a commodity or more of a commodity than would have been bought under linear pricing.

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