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The B.E. Journal of Theoretical Economics

Editor-in-Chief: Schipper, Burkhard

Ed. by Fong, Yuk-fai / Peeters, Ronald / Puzzello , Daniela / Rivas, Javier / Wenzelburger, Jan

IMPACT FACTOR 2017: 0.220
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CiteScore 2017: 0.28

SCImago Journal Rank (SJR) 2017: 0.181
Source Normalized Impact per Paper (SNIP) 2017: 0.459

Mathematical Citation Quotient (MCQ) 2017: 0.09

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Monopoly Pricing over Time and the Timing of Investments

Ornella Tarola
Published Online: 2006-12-04 | DOI: https://doi.org/10.2202/1534-598X.1263

We consider a monopoly producing a good whose demand grows over time. Whatever the price policy which is adopted, the monopolist invests in order to meet the resulting demand growth. She can only invest in indivisible factory units. We identify the optimal price policy, and the ensuing optimal sequence of investment time points the monopoly selects through time. We show that this sequence satisfies the constant cycle property observed under capacity expansion for an exogenous increase in demand (Manne, 1961).

Keywords: planning investment; firm size; economic behavior

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Published Online: 2006-12-04

Citation Information: Topics in Theoretical Economics, Volume 6, Issue 1, Pages 1–17, ISSN (Online) 1534-598X, DOI: https://doi.org/10.2202/1534-598X.1263.

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