Discuss how Post Keynesian mark-up pricing models are able to encompass the strategic decisionsmade by corporations regarding their survival and growth through time. What are the mainmacroeconomic implications suggested by these mark-up pricing models Essay Example
Keynesian Make Up
Keynesian Make Up
In order for Keynesian mark-up pricing models to be able to encompass the strategic decisions made by corporations in regard to its survival and growth through time, they considered the expected price output. This means that, the models considered the price of the product to ensure that the prices of the products are higher than the production cost. The decisions made on the output prices of the products enhances the effectiveness of the firm since the price that is decided upon by the firm, is the price that is going to be available in the market.
In the case of OECD for example; one of the strategic decisions made to address the issue of unemployment / labor involves the improvement of the performance of the labor market. The organization sort to address the rising rate of unemployment and in doing so, it limited the adverse effects of aging population while at the same time, it assisted the society in general to adjust effective to technological advancements and globalization.
The implications of mark up pricing models include the fact that is exhibits independence. Instead of being interactive, it independently considers issues associated with changing cost structures and changing sets of competitive pressures on prices and mark up determination. Cost induced pricing influences demand due to competition that accrues from demand. Therefore, because mark up pricing models induces prices on products, it affects the demand of the product associated with competition and lack of interaction in regard to supply and demand.
Mark up pricing models also influence future strategies. This is attributed to the fact that they influence adjustment which may be triggered by the need to deal with adjustment pressures. Furthermore, the functioning of the market is bound to be affected because of the consequences of mark up pricing e.g. for OECD, technological advancement will influence how the labor market functions.
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