Joint Profit Maximization,Negotiation, and the Determinacy of Price in Bilateral Monopoly |
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| Authors: | Dale B. Truett Lila J. Truett |
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| Affiliation: | Division of Economics and Finance at the University of Texas at San Antonio |
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| Abstract: | Many economists teach that joint profit maximization leads to a determinate quantity and indeterminate price of the intermediate good traded. Using isoprofit curves, the Truetts argue that only one price is consistent with rational behavior and the goal of profit maximization. |
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| Keywords: | classroom experiment distribution equality fairness normative economics |
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