Definition: Affine pricing is a pricing schedule where there is a fixed cost or benefit to the consumer for
buying more than zero, and a constant per-unit cost per unit beyond that.
Formally, the mapping from quantity purchased to total price is an affine
function of quantity.
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Using, mostly, Tirole's notation, let q be the quantity in units purchased, T(q) be the total price paid, p be a constant price per unit, and k be the fixed cost, an example of an affine price schedule is T(q)=k+pq.
For alternative ways of pricing see linear pricing schedule and nonlinear pricing.(Econterms)
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About.Com Resources on Affine Pricing:None
Writing a Term Paper? Here are a few starting points for research on Affine Pricing:
Books on Affine Pricing:
- Tirole, Jean. 1988, 1993.
The Theory of Industrial Organization.
MIT Press.
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