| The subject of optimal pricing is consistently on the forefront of debate among firms in all market situations. Optimal pricing is further complicated when there are common resource inputs associated with the production of a multitude of different products. Economic theory has suggestions for pricing optimally in a variety of market conditions, from perfect competition, to perfect monopoly. This paper presents an experiment where a firm is attempting to optimally price multiple products with common cost inputs subject to monopolistic market conditions. The result supports the hypothesis of substitution amongst the product line relative to prices, as well as presents some evidence of optimal prices for both products. |
