The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Administered Prices

  • P. J. D. Wiles
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_463

Abstract

Administered prices are prices set by enterprises, private or public, large or small, of their own volition in free markets for a period that they determine; so that prices do not fluctuate in the ‘short run’ with supply and demand. The market is cleared from moment to moment within this period by stock movements in the product and/or by queues of customers; and often by changes in production volume. The ‘short run’ includes periods long enough for it to seem bureaucratically possible to vary the price and thus to make more profit. Therefore s.r.m.c./s.r.m.r., and administered prices constitute a failure to maximize profits. The administrator in this context is always the seller.

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • P. J. D. Wiles
    • 1
  1. 1.