Ramsey Pricing

Definitions

Economics

  • noun
    (written as Ramsey pricing)
    a pricing rule by which price rises or increased taxes should be made on those goods for which there is the greatest demand, and not on those which are particularly price-sensitive.

Health Economics

  • This is a pricing principle that minimizes the welfare loss when production is monopolistic and subject to a minimum profit constraint. The rule is to set prices so as to exceed marginal cost by a sum that is inversely proportional to the elasticities of demand.
  • synonyminverse elasticity rule
  • synonymInverse Elasticity Rule
    (written as Ramsey pricing)
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