# Limit Pricing

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An incumbent is limit pricing if it produces more than its optimal quantity, so that there is not sufficient demand for a potential entrant. The lowest price that it sets is the "limit price" that excludes a profitable entry.

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Contributed by: Christos Papahristodoulou (January 2014)

(Mälardalen University, Sweden)

Open content licensed under CC BY-NC-SA

## Snapshots

## Details

Reference

[1] D. Carlton and J. Perloff, *Modern Industrial Organization*, 4th int. ed., Pearson Addison–Wesley, 2005.

## Permanent Citation

"Limit Pricing"

http://demonstrations.wolfram.com/LimitPricing/

Wolfram Demonstrations Project

Published: January 10 2014