A "price taker" is a firm that Question 8 options: does not have the ability to control the price of the product it sells. does have the ability, although limited, to control the price of the product it sells. can raise the price of the product it sells and still sell some units of its product. sells a differentiated product. none of the above

Question

Jose Villa

Business

1 April, 20:30

A "price taker" is a firm that Question 8 options: does not have the ability to control the price of the product it sells. does have the ability, although limited, to control the price of the product it sells. can raise the price of the product it sells and still sell some units of its product. sells a differentiated product. none of the above

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Toby Johns · Answer 1

Does not have the ability to control the price of the product it sells

Explanation:

A price taker is a firm that doesn't have the ability to control the price of the product they sell.

Price taker exist in a perfectly competitive market where individual firms cannot dictate prices of goods and services.

A perfectly competitive market is characterised by

1) presence of large number of buyers and sellers.

2) There is free entry and exit.

3) Sellers sell homogenous product, that is, identical product.

4) Buyers have access to information.

In contrast to price taker, we also have price makers who have the ability to control the prices of product they sell.