A Rule of Thumb for Pricing: Example 10-. 1 Market for antiulcer drugs. The marginal cost of producing & packaging Prilosec is only about 30 - 40 cents. 3.5 = .3.

This chapter deals with various rules of thumb and pricing practices that can be We already discussed that the optimal markup on price is: .. Microeconomics.

The optimal investment rule satisfies a trade-off between a exactly the same form as the formula for a firm's optimal markup of price over marginal cost.

On Repeated Myopic Use of the Inverse Elasticity Pricing Rule are too large relative to the optimal price change (Fjell, 2003). While some mainstream microeconomics textbooks suggest that the rule may be used repeatedly to and Rubinfeld (2005), the rule in (1) is referred to as “A Rule of Thumb for.

price elasticity,, is a measure of price sensitivity; Optimal price is Pricing. Optimal mark-up rule of thumb: P*=MC*/(1-1/ *); where * indicates estimated value.