a price taker is
price maker. Definition. An individual or company which is influential enough to affect the price of an item. Someone who holds a large majority of a stock would likely affect the price of the stock if they bought or sold it. YES NO 2 people found this helpful. “ Business Place, Inc. is the industry price maker for their new product line because no other company's product can compete with the Buisness Place, Inc. product quality. Price Taker. What it is: A price taker is a person or company that has no control to dictate prices for a good or service. In the trading world, a price taker is a trader who does not affect the price of the stock if he or she buys or sells shares. The concept of a price taker is best illustrated with an example. Price Maker. What it is: In economics, a price maker is a monopolistic company that can dictate the prices of its goods because there are no substitutes for it. In trading, a price maker is a stockholder who controls a large number of shares and is able to affect the stock's price. What is a 'Price-Taker'. A price-taker is an individual or company that must accept prevailing prices in a market, lacking the market share to influence market price on its own. A price taker, as the name implies, has no ability to charge a price above the going market price. If it does, it will lose all of its customers to the myriad of other competing sellers. In price-taker markets, prices are not set by an individual firm, but by the broader market via the forces of supply and demand. All economic participants are considered to be price-takers in a market of perfect competition, or one in which all companies sell an identical product, there are no barriers to entry or exit, every company has a relatively small market share, and all buyers have full information of the market. What is a 'Price Maker'. A price maker is a monopoly or a firm within monopolistic competition that has the power to influence the price it charges as the good it produces does not have perfect substitutes. A price maker that is a firm within monopolistic competition produces goods that are differentiated in some way from its competitors' products. Price Taker. What it is: A price taker is a person or company that has no control to dictate prices for a good or service. In the trading world, a price taker is a trader who does not affect the price of the stock if he or she buys or sells shares. How it works (Example): The concept of a price taker is best illustrated with an example. A price taker is a firm that produces an undifferentiated product in an industry composed of many firms. Such a firm is selling a commodity for which there are endless substitution possibilities. Examples of price takers are frequently found in the markets for agricultural products (e.g., wheat, corn) and financial assets (e.g., stocks, bonds).
A price taker is a person or company that has no control to dictate prices for a good or service.