Seller's Transition from Price-Taker to Price-Maker in the Hat Market
In a market experiencing excess demand, a seller may transition from a price-taker to a price-maker based on direct observations. For example, a hat seller who consistently sells out of stock may infer that there is unmet demand. This realization is strengthened by observing that some potential customers are unable to make a purchase and that even some existing customers would have been willing to pay a higher price. Acting on this information, even without knowing the specifics of the new demand curve, the seller may strategically raise their price, thereby becoming a price-maker.
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Sociology
Social Science
Empirical Science
Science
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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