Price Takers' Plenty in a Model of Pure Capitalism.

Scitovsky, Tibor

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Document type:: Collected items

Collection:: Josef Steindl Collection

Title:: Price Takers' Plenty in a Model of Pure Capitalism.

Author:: Scitovsky, Tibor

Scope:: Kopie eines Typoskripts, 27 Blätter, mit handschriftlicher Korrektur und Korrektur mit Korrekturfolie, Paginierung von 5.1-5.20 und von 3.21-3.26

Year of publication:: 1983

Source material date:: [November 1983]

Language:: English

Note:: Draft.

JEL Classification:: D41 [Market Structure, Pricing, and Design: Perfect Competition]

Shelfmark:: S/M.33.7

Rights of use:: Free access In Copyright

Access:: Free access

DOI:: https://doi.org/10.48671/nls.js.AC14446418

5-3 The share of profits in such an economy is bound to be large, of course; but so is their strength as a motive force and their ability to buffer non-profit earners from external shocks. The capitalist's dominant position is formally manifest in the asymmetrical nature of market relations in markets in which he confronts people other than fellow capitalists: consumers, workers, small farmers, artisans. I have in mind the price-maker price-taker relationship, with the capitalists playing the price maker's role and announcing the terms on which they are prepared to do business on a take-it-or-leave-it oasis. Large capitalists are price makers also in markets where they face small capitalists: producers facing traders, wholesalers facing retailers. Shoppers' Paradise. The price-maker seller sets his price by adding the profit- maximizing markup to marginal cost: p = KC(1 + where e is the absolute value of the price elasticity of demand facing him.

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