Price makers
Definition
Price makers are firms or individuals that have the ability to set the price of a product or service in the market. They have control over the supply and demand conditions, allowing them to influence prices.
Analogy
Imagine you're hosting a lemonade stand and you're the only one selling lemonade in your neighborhood. Since there's no competition, you can decide how much to charge for each cup of lemonade.
Related terms
Monopoly: A type of market structure where there is only one seller who has complete control over the market, including setting prices.
Oligopoly: A market structure where a few large firms dominate the industry and have some control over prices.
Market power: The ability of a firm or group of firms to influence prices and output in a market.
"Price makers" appears in:
Study guides (3)
Additional resources (1)
Practice Questions (1)
- In imperfectly competitive markets, firms are "price makers." What does this mean?
Resources
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