First p.

Economists that examines about the pricing strategies acquised to the idea that
selling price is the solitary relevant variable that is related ti price. The
article concentrated for the consumer behavior by integrating reference prices,
this also synthesizes the dynamis pricing policy. The author studied and focuses
only on the dynamic pricing of a monopolistic firm, where in the descriptive
aspects of its consukers are taken into account. The analysis of the ideas
amalgamated the main behavioral element of decision making, the referwnce peice
dependence. This comes up to the idea that demant depends upon the selling price
and reference price of a specific product. The author defined reference price as "
a psychological variable inteenal to the consumer, is formally operationalized by
the past obsevered lrices". In this case, this research informs the litereture
studyung the behavioral element as a drivee of dynamic pricing. The author uses the
general demant punction to establish resultes and linked to the sole propeeties of
the demand funCtion
2nd p.

The author uses monopolistic firm as a situation, he uses the equation [0;T] where
in the horizon of the firm (T) is infinite and the time is 2. The author
illustrates how the consumer decide to purchase a product on the basis of selling
price and reference price. The results are interpreted as follows: First result, "
if consumer respond to a reference price then the demand is more elastic". In
generalized manner, the monopolistic firm loses market power where in it can get
less rent from the demand and it will cause less charge to maximize profit. Second
result the author formulates is that " a higher reference price for the consumer
does not always imply a higher selling price". To make it simple, reference price
dynamics does not emulates selling price dynamics but, the impact of an increase
reference price on the selling price is the sum of three competeing effects: No
adjustment baseline case, No reference baseline case and Adjustment and reference
case.Horizon of the firm ( T)
3rd p

Reference price plays an important role observable on the decision of every

consumers. The modeling of the article assumes that the fiem behaves in a monopoly
market and the consumers do not anticipate future prices. The introduction of the
competition with in the model of framework used would not make the forces pushing
toward a negative selling reference price relationship vanish but the introduction
of fiture prices anticipation by a consumer may change the results. The insights we
can get from the article is that it can came from other market conditions. And if
the restrictions on consumer's behavior are not met, it will affect the reference
dependence.A firm that misunderstoods its effects will lose profit.I realized that
we must consider the selling price and reference price to work on the generel
demand function which leads to highee profit.