<p>You are correct. A monopoly is a price <em>maker</em>. Not a taker.</p>

<p>A monopoly has the power to influence the price it charges as the good it produces does not have perfect substitutes. A price <em>maker</em> within monopolistic competition produces goods that are differentiated in some way from its competitors' products.</p>

<p>I suppose a monopolistic firm <em>could</em> be a price taker via matching random re-sellers prices on singular items, however that would be operating at a loss a majority of the time. The idea with that though is to retain the customer business for the future, not to make a single small profit on one item, one time. </p>

CC BY-SA 4.0
2019-05-08T13:34:42.060Z
Thank you very much for your quick reply! so would you say the answer to this question is True or False?
Fozoro
CC BY-SA 4.0
2019-05-08T13:43:07.373Z
I would say the answer is False, however it is important to understand not 100% of the time. The question does say a SINGLE firm, so actually in the universe of this question, 100% of the time FALSE.
Clinical_Coder
CC BY-SA 4.0
2019-05-08T13:47:27.197Z
As far as I understood the second paragraph you wrote refers to "the exceptions situtation" though are there any in real life or is it just theoretical?
Fozoro
CC BY-SA 4.0
2019-05-08T14:00:42.053Z
There is plenty of real life examples as it pertains to resellers. Some monopolistic companies(Target, Best Buy, Walmart, Home Depot, Lowe's, Staples, even Amazon) offer price matching. When these companies price match to someone else's price even though technically they are still the monopoly power, they lose money a majority of the time.
Clinical_Coder
CC BY-SA 4.0
2019-05-08T14:02:47.397Z
Oh I see didn't really think about this. Though would this be considered more as price discrimination (Those who have the time and will to search for the better deals will get a different price than those who don't really care about overpaying).
Fozoro
CC BY-SA 4.0
2019-05-08T14:13:26.057Z
So price discrimination is a little different, price discrimination would be for example Amazon saying - "Look you shop here a lot, we like you, so sure we will price match you at the competitors price." And then turn around when you try to do it and say - "You don't shop here often, we are only going to price match you at x+y rate of the competitors price." Amazon actually does this. If you are an avid Amazon purchaser, and you order something but it doesn't show up, they refund you. However if you are not an avid Amazon purchaser, most of the time they just say watch out for scams.
Clinical_Coder
CC BY-SA 4.0
2019-05-11T14:54:04.023Z
Several monopolies are regulated and set price to marginal or average costs.
Bertrand
CC BY-SA 4.0
2019-05-08T13:31:10.520Z
2019-05-08T13:31:10.520Z
Clinical_Coder
<p>I have the following True/False question:</p>

<blockquote>
  <p>A single price-taking firm on the market is called a monopoly.</p>
</blockquote>

<p>As far as I know, a monopoly is a <em>price maker</em> not a <em>price taker</em>. That being said if it is a single firm how in the world can it not be a monopoly? </p>

<p>In my opinion, the answer to this question is False.</p>

<p>Could anyone possibly explain to me if my way of thinking is correct? and if a monopolistic firm can be a price taker?</p>

<p>Thank you very much</p>

<microeconomics><monopoly><price>
Are monopolies always price makers?
Fozoro
# Are monopolies always price makers?

(Asked by: username_0 on 2019-05-08)

I have the following True/False question:

> A single price-taking firm on the market is called a monopoly.

As far as I know, a monopoly is a *price maker* not a *price taker*. That being said if it is a single firm how in the world can it not be a monopoly?

In my opinion, the answer to this question is False.

Could anyone possibly explain to me if my way of thinking is correct? and if a monopolistic firm can be a price taker?

Thank you very much

**Tags:** microeconomics, monopoly, price


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## 1 answers

### Answer by username_1 on 2019-05-08. Score: 0 | Accepted answer

You are correct. A monopoly is a price *maker*. Not a taker.

A monopoly has the power to influence the price it charges as the good it produces does not have perfect substitutes. A price *maker* within monopolistic competition produces goods that are differentiated in some way from its competitors' products.

I suppose a monopolistic firm *could* be a price taker via matching random re-sellers prices on singular items, however that would be operating at a loss a majority of the time. The idea with that though is to retain the customer business for the future, not to make a single small profit on one item, one time.

> **Comments:**
> **username_0**: Thank you very much for your quick reply! so would you say the answer to this question is True or False?  
> **username_1**: I would say the answer is False, however it is important to understand not 100% of the time. The question does say a SINGLE firm, so actually in the universe of this question, 100% of the time FALSE.  
> **username_0**: As far as I understood the second paragraph you wrote refers to "the exceptions situtation" though are there any in real life or is it just theoretical?  
> **username_1**: There is plenty of real life examples as it pertains to resellers. Some monopolistic companies(Target, Best Buy, Walmart, Home Depot, Lowe's, Staples, even Amazon) offer price matching. When these companies price match to someone else's price even though technically they are still the monopoly power, they lose money a majority of the time.  
> **username_0**: Oh I see didn't really think about this. Though would this be considered more as price discrimination (Those who have the time and will to search for the better deals will get a different price than those who don't really care about overpaying).  
> **username_1**: So price discrimination is a little different, price discrimination would be for example Amazon saying - "Look you shop here a lot, we like you, so sure we will price match you at the competitors price." And then turn around when you try to do it and say - "You don't shop here often, we are only going to price match you at x+y rate of the competitors price." Amazon actually does this. If you are an avid Amazon purchaser, and you order something but it doesn't show up, they refund you. However if you are not an avid Amazon purchaser, most of the time they just say watch out for scams.  
> **username_2**: Several monopolies are regulated and set price to marginal or average costs.  

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