Skip to main content Accessibility help
×
Hostname: page-component-5c6d5d7d68-wp2c8 Total loading time: 0 Render date: 2024-08-16T20:11:40.062Z Has data issue: false hasContentIssue false
This chapter is part of a book that is no longer available to purchase from Cambridge Core

Conclusion

Get access

Summary

Market price is the main approach that the economy as a science employs as an indicator of scarcity or abundance of supply or demand in every market. The problem appears when price is manipulated by one side of the market, when price loses its status as an indicator, which means the market doesn't work freely. This is due to the fact that we lose the right information about each market in question. Market price has given rise to a lot of written opinions since scholastics’ just price, amongst them that of Adam Smith, who in 1776 wrote about the difference between price of competition and monopoly price:

The price of monopoly is upon every occasion the highest which can be got. The natural price, or the price of free competition, on the contrary, is the lowest which can be taken, not upon every occasion, indeed, but for any considerable time together. The one is upon every occasion the highest which can be squeezed out of the buyers, or which, it is supposed, they will consent to give; the other is the lowest which the sellers can commonly afford to take, and that the same time continues their business.

Economists are looking for a way to demonstrate which price has been reached in a competitive market and is, therefore, fair, and which price responds to a monopolistic market because suppliers are getting extra profits due to market control. The idea is not difficult to understand, indeed, the difficulty lies in demonstrating who are the agents and how they are controlling the market.

Type
Chapter
Information
Barriers to Competition
The Evolution of the Debate
, pp. 169 - 174
Publisher: Pickering & Chatto
First published in: 2014

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Save book to Kindle

To save this book to your Kindle, first ensure coreplatform@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×