Due to the setup cost of labour supply in the informal and the formal sector, many are left in self-employment. This introduces markup pricing of goods that are produced under constant returns to scale. This strategic supply has the value generated in a markup ridden equilibrium, for a given markup rate. A subset of consumers restricts its supply of factors. There is perfect competition in goods.
Equipment is treated as numeraire.
Producers are competitive. The markups are obtained via minimization of every consumer's net expenditure value keeping all strategic reserves fixed. A subset of consumers adjusts its net demand for factors. Producers are competitive. The markups are obtained via separate maximization for every consumer of his net expenditure value keeping all strategic consumption fixed.