- 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.
- 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)