This paper extends the mark-up rule relating a firm's profit-maximizing price to its marginal cost and its elasticity … of residual demand to the news vendor problem with endogenous pricing. Two adjustments are necessary. First, the relevant … elasticity of demand is the elasticity of the average quantity sold with respect to price. Second, marginal cost is the marginal …

We characterize the dispersion of firm-level productivity and demand shocks using Swedish microdata including prices … and utilization and analyse the consequences for firms and the aggregate economy. Demand dispersion increases by more than … dispersion. Demand shocks explain most of the variation in sales dispersion. In a heterogeneousfirm model matching the micro …

We characterize the dispersion of firm-level productivity and demand shocks over the business cycle using Swedish … microdata including prices and analyse the consequences for firms and the aggregate economy. Demand dispersion increases by more … on sales dispersion. Demand shocks explain most of the variation in sales dispersion. In a heterogeneous-firm model …