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Plaza Two (F3)<br />An agreement of the GROUP oF FrvE in Paris in February 1987 to support the US dollar by attempting to increase Japanese and West German imports and to stabilize leading currency rates at the same levels.
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administered pricing (D4, M2)<br />The practice of setting prices according to a formula, irrespective of the short-run forces of demand and supply. This is possible because of the market power of monopolistic and oligopolistic firms. As it is expensive to change prices (e.g. new catalogues have to be printed) and as there is always the possibility of adverse consumer reaction, there is a tendency for prices to be more rigid when administered. As part of an anti-inflation programme, especially in wartime, governments will administer major prices, the prices of goods and services prominent in most consumers' budgets; in these circumstances the rules for increasing prices are strictly laid down. Most administered prices are calculated by adding a profit margin to AVERAGE COST.<br /><em>See also:</em> mark-up pricing <br /><em>Reference</em><br />Means, G.C. (1935) 'Industrial prices and their relative inflexibility', Senate Document No. 13, Washington, DC: US Government Printing Office.
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