Methodological approaches to the pricing in the raw milk market

Abstract

This article provides methodological approaches to the pricing mechanism in the market of raw milk. It also provides the structure of the market and participants’ role In pricing. The author proposes his own interpretation of the notion "market of raw milk". In terms of the theory of competition it is proved that the market of milk is considered to be a market of monopolistic competition with a characteristic proximity to monopsony. The article determines a role of pricing mechanism as one of the most important type of inter-sectoral interaction between subjects of the market and specifies methodical approaches to pricing process implementation. The technology of formation of raw milk price consisting of seven successive stages are developed and presented schematically herein. The article also provides the way of profit distribution among the members of the market by determining the rate of profit and expenses for each participant.