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Under conditions of either perfect or semi-perfect competition goods and services are, in effect, sold at auction to the highest bidder. Services have scarcely ever been sold like that; and, even in medieval times, most artisan products were sold in a different fashion. In modem industrialized economies only a very small proportion of total output — at most about 10–20 per cent — is sold by auction. The great bulk of products is sold at prices fixed by their producers or sellers. I have borrowed from Professor Hicks the term ‘fixprice’ to describe this type of market.
KeywordsMarginal Cost Demand Curve Cost Curve Marginal Revenue Limit Price
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- 1.See Joe S. Bain, Barriers to New Competition (Harvard University Press, 1956); and Paolo Sylos-Labini, Oligopoly and Technical Progress (Harvard University Press, 1962).Google Scholar