This paper examines whether, with the rise of monopoly capital, the classical theory of competition and the prices of production framework has to be replaced by a theory emphasizing the balance of power relations between different economic groups. It briefly reviews concepts of competition and monopoly power, the recent literature in support of classical competition, and develops a model synthesizing the Sraffian prices of production framework and the Kalecki-Steindl monopoly power theory. It shows that although monopoly power and the uniform rate of profit are not necessarily inconsistent, the theory of prices may well have to be revised as a result of the emergence of monopoly power.
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