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

5.18 
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Also, if the price maker’s quantity adjustments exhaust the limited 
scope he had for making such adjustment at a profit, he restores his 
potential for profitable quantity adjustments every time he his 
prices, because he will always set them at their most profitable level, 
which is above the MC of what he sells and below the MVP of what he buys* 
Employment creation through quantity adjustment has its counterpart 
also\..in product markets and may there be called product creation and 
quality adjustment. For part of the fringe benefits created by nonprice 
competition among sellers is their search for buyers* unfilled needs, for 
new products and improvements of existing products for which there exists a 
profitable potential market, waiting to be opened up. That is an important 
source of technical progress and growth, which again is a manifestation of 
the producers* excess supply, created by the gap, in this case the potential 
gap between price and MC. To put it succinctly, R&D is unprofitable 
without producers* domination of product markets* 
Let me now relate the theoretical model to today’s reality* I think it 
describes pretty well what happens in product markets, where sellers continue 
to dominate* In factor markets, however, price makers and price takers have 
more or less changed places; and there is an excess supply of labor rather than 
an excess demand, and nonprice competition for labor is not much in evidence, 
except in Japan and a few So 
markets, certainly Japan*s, 
exceptions are important && 
with the way in 
which factor markets have changed fore discussing the Japanese easel
	        

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