Question
We are thinking about What is a specific,real-life example of aseller in the world today that meets the definition of a price taker ? One
We are thinking about What is a specific,"real-life" example of aseller in the world today that meets the definition of aprice taker?
One of my classmates stated
Price-takers are firms operating in perfectly competitive markets, where they compete with a lot of sellers in the market selling to a large number of buyers. Since the competition is huge, firms settle for the price obtained by the market forces of demand and supply. This makes the market forces are price-maker and the firms as price-takers, as they have no power the set the price themselves ,because of low market power, and they use the market price as their firm price. For example, fruits and vegetable sellers. Since there are a lot of such sellers in the market which sell the exactly same fruit/vegetable to a large number of buyers. The price is set by the market and any change in price by any seller will either lead to lossesfor him or 0 sales.
On the other hand, the reverse of a price taker is a price maker; this entity sells in such volume or has such differentiated products that it can set prices that customers will accept. A price maker tends to have a significant market share. In economics, market power is the ability of a company to change the market price of goods or services.
In this state, I would like to know your own understandingof the (four) characteristics of aprice taker(versus aprice searcher) in the Product Market.
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