In microeconomics, joint product pricing is the firm's problem of choosing prices for joint products, which are two or more products produced from the same process or operation, each considered to be of value. Pricing for joint products is more complex than pricing for a single product. To begin with, there are two demand curves. The characteristics of each could be different. Demand for one product could be greater than for the other. Consumers of one product could be more price elastic than consumers of the other (and therefore more sensitive to changes in the product's price).
To complicate things further, both products, because they are produced jointly, share a common marginal cost curve. There are also complexities in the production function. Their production could be linked in the sense that they are bi-products (referred to as complements in production) or in the sense that they can be produced by the same inputs (referred to as substitutes in production). Further, production of the joint product could be in fixed proportions or in variable proportions.
joint, product, pricing, this, article, does, cite, sources, please, help, improve, this, article, adding, citations, reliable, sources, unsourced, material, challenged, removed, find, sources, news, newspapers, books, scholar, jstor, december, 2009, learn, wh. This article does not cite any sources Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed Find sources Joint product pricing news newspapers books scholar JSTOR December 2009 Learn how and when to remove this template message In microeconomics joint product pricing is the firm s problem of choosing prices for joint products which are two or more products produced from the same process or operation each considered to be of value Pricing for joint products is more complex than pricing for a single product To begin with there are two demand curves The characteristics of each could be different Demand for one product could be greater than for the other Consumers of one product could be more price elastic than consumers of the other and therefore more sensitive to changes in the product s price To complicate things further both products because they are produced jointly share a common marginal cost curve There are also complexities in the production function Their production could be linked in the sense that they are bi products referred to as complements in production or in the sense that they can be produced by the same inputs referred to as substitutes in production Further production of the joint product could be in fixed proportions or in variable proportions See also EditMarketing Pricing Production costs and pricing Cogeneration Carnot method nbsp This economics related article is a stub You can help Wikipedia by expanding it vte Retrieved from https en wikipedia org w index php title Joint product pricing amp oldid 856978844, wikipedia, wiki, book, books, library,
