Per the definition, a price taker is someone with no impact on the market. You say the firms are price takers. That begs the definition of "the firm", which is exactly what I expect it to be. My company is a firm, and trust me, it is not a "price taker". It is a low cost, high quality components. As I defined in an earlier post, there are variations between companies offerings that impact cost (to me), and that impact price (to my customer). They are perfect substitutes in in that they are interchangable in the application (form, fit and function), but not perfect substitutes in price, availability, and even customer trust. So, to me the statement "firms are price takers" is untrue, except maybe in an the ideal world (like the knotted undies over the term "free market capitalism). You can talk ideal world economics, which I see as interesting, but pretty much useless in explaining the real world.
"Real world" economics doesn't confuse supply and demand whilst bogusly calling it Laffer related. That would just be someone making gross error
The Laffer curve is simply an observation that you can only steal so much wealth from producers before they will just stop producing well, duh! The Laffer curve doesnt work at all with honest, voluntary land value taxation. Even Laffer admitted as much.
Please don't spam the thread with Georgist garbage! This is about supply side economics and the empirical analysis that shows the Laffer curve is multi-peaked. If you can't refer to that analysis then stick to the single tax utopian threads
The Laffer curve doesnt work with honest and voluntary land value taxation policy it is junk, why even discuss it?
The Laffer curve has been empirically tested numerous times. If you can't discuss it leave the thread.
I am discussing it. The Laffer curve is simply a warning that oppressive tax schemes can only be carried so far, after that the oppression becomes more than the market can bear. I am simply pointing out that the Laffer curve holds no truth when applied to honest and voluntary land value taxation. Land value taxes produce more government revenue the higher they are levied, and produce the maximum revenue when levied at 100% of land values. The Laffer curve works great for analyzing how much oppression the market can bear, but as for taxation policy, it is a gigantic failure.
No you're not. You've come here to try and spam the thread with Georgist garbage. The purpose of the thread is straight forward. We know that the Laffer curve isn't single peaked. The question is then: what are the consequences for supply side economics? Answer or find a Georgist thread to give the tired utopianism!
Not true, they simply can't demand whatever price they want from consumers something (generally)only a monopoly is able to do. You impact the market, but you don't dictate price, I think the main issue is how you view price, likely as a dollar amount you sell something to someone for, when in reality price is just a signal in a best case scenario reflecting demand and scarcity. Organization that evolve to avoid the costs associated with using the market or protecting their property rights, I'm sure you're company is a firm and unless you A) Do something highly specialized B) Have extreme market power or C) are a monopoly then yes, you most certainly are a price taker. I'd like to be more polite in this response but I'm going to have to just be plain instead... It's not up to you, it's a simple statement of fact that frankly isn't really up for discussion, you can't on one hand believe in S&D and on the other say that most or even a plurality of firms are price givers, it just doesn't jive.
I parroted the definition you directed me to: Definition of 'Price-Taker' 1. An investor whose buying or selling transactions are assumed to have no effect on the market. 2. A firm that can alter its rate of production and sales without significantly affecting the market price of its product. Investopedia explains 'Price-Taker' 1. In the context of the stock market, individual investors are price-takers. I have worked in electronic components for 30 years. I have worked for small companies and 800 pound gorilla's, both competing for the same customers. I have sold to small companies and 800 pound gorilla's. There is no significant difference in how prices were negotiated. The range of price between 0% allocation and 100% allocation is pretty small, but it is not zero. I wasn't the one that said firms are price givers.
Well then it was my mistake, I was assuming you were using "effects the market" outside of an economic context. There's of course some flexibility, but competition ensures your not a price giver unless you meet one of the scenarios I described. As I said, it's just a general rule of them, cost-plus pricing allows firms to shatter that paradigm, which brings us round full circle =) You're either a giver or a taker, there's clearly some grey area but in terms of the macro understandings of the concept, it's black or white.
How does cost plus shatter any paradigm? As best I read the definition, it is what I stated earlier, cost plus an "acceptable" profit. Black and white doesn't apply to real world.
You made a pathetic error, confusing the issue with supply side laffer whilst misdefining a well known concept. Try validity!
Just because the Laffer Curve is used by supply side economists doesn't mean the Curve itself or supply side economics is necessarily wrong, but merely that the implementation of supply side economics may be wrong for our political-economy. From my understanding the Laffer Curve could be used to find more optimal taxation ratios in our economy. However, that does not account for political passions of the moment, which may have nothing to do with economics; as was proved by a former president.
In my opinion, taxes should be a optimum tax revenue generation rate whenever possible, and especially when running massive deficits.
So by increasing taxes, forcing white sector into black sector, which would decrease revenues since black sector does not pay into it, would do what? Since you think taxes should be increased but it would decrease revenues to the state, that means they should raise taxes?
What about for obtaining an ideal productivity rate for widget manufacturing; would such a curve not make sense in that case?
Does Apple work on cost plus, or control the supply, so they can demand higher prices? How does cost plus work if there isn't a demand? I see economics as far more complex than "black and white", and I'm myopic? Do you know the definition of myopic?
I don't care what political economic school of thought you squirt too! Confusing supply andd demand is just poor!
From my understanding, we could use that economic tool to achieve more optimum rates of taxation that generate optimum rates of revenues; especially when running massive deficits-instead of some abstract and social form of equality regarding progressive forms of taxation in any capital based, market economy.
From what I read, cost plus is a method of ensuring a return on investment, potentially, in a vacuum of special pleading regarding market conditions.