Introduction
In a truly competitive market, manufacturers and providers of other goods and services are price-takers. That is, there is no incentive rationale why a provider should “price below the marketplace” or even to price above others. Similarly, in a competitive market, the price of the good is “determined by the market supply and the market demand” for it (Baye, 2010). Since competitive markets are considered here, there is also a correlation between what consumers are willing to pay (also known as “price makers”) and how much labor is needed by a producer to meet the needs for this demand Continue reading...
