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

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 
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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