Budget Allocation and Monopolistic Pricing in a Multiproduct Firm

摘要

The budget of a multiproduct dominant firm has to be allocated to the severalproduction centers within the firm. The objective is to maximize the firm's profit given price demand functions and production functions of the individual products. A solution method based on Lagrange decomposition is presented. This results in a product ranking having a clear economic interpretation and an analysis of the allocation policy. (Copyright (c) 1993 by Faculty of Technical Mathematics and Informatics, Delft, The Netherlands.)