Econometrica: Nov 1977, Volume 45, Issue 8
Nonlinearity of Delivered Price Schedules and Predatory Pricing
John Greenhut, M. L. GreenhutThe sets of local demand functions which would generate either linear or nonlinear schedules in a heterogenous as well as homogeneous space economy are determined by iterative applications of the separation of variables technique for solving differential equations. Nonlinear delivered price schedules which reflect profit maximization objectives are thereby identifiable. In turn, these schedules can be distinguished from those which involve strictly predatory price behavior.
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