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3. What do economists mean the concepts of a price taker and price maker? (6%)

3. What do economists mean the concepts of a price taker and price maker? (6%)

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Answer #1

Price taker refers to a market participant that is not able to dictate the prices in a market.A price taker must accept the prevailing market price.he accept the prevailing market price and sell each unit at same market price.its mostly found in perfectly competitive markets.

Price makers are opposite of price taker.they are able to influence the market price and enjoy pricing power.these are found in imperfectly competitive market like monopoly or oligopoly market.

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