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Price-Making and Disequilibrium Rents in Non-Equilibrium Markets
When a market is in a state of disequilibrium, such as having excess supply or demand, the conditions allow for some buyers and sellers to become price-makers. By transacting at prices that differ from the previous equilibrium, they can capture economic gains known as disequilibrium rents. For instance, in a situation of excess supply, a buyer might successfully negotiate a lower price that is still profitable for the seller relative to their marginal cost. This potential for advantageous trades by price-making participants is a key driver that pushes the market toward a new equilibrium. [2, 4]
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Sociology
Social Science
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Economics
Economy
Introduction to Microeconomics Course
CORE Econ
Ch.8 Supply and demand: Markets with many buyers and sellers - The Economy 2.0 Microeconomics @ CORE Econ
The Economy 2.0 Microeconomics @ CORE Econ
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