The industry has experienced rapid growth. The growth has attracted many competitors to the industry. However, marketing campaigns, to differentiate their products have been successfull. The main cost to the producers is the filtering system and as a result of the growth has led to a reduction in the cost of the systems. My question is is this a price searcher or price taker?
So can someone please explain why it is a price taker in this case? Lots of growth, many competitors, small margins. You have to take the price that is the going rate when you get into that business. I think. Only a firm with some degree of monopoly power can be a price-setter.
A price-setter is contrasted with a price-taker, which is a competitive firm or individual who has to treat the market price as given. From: price-setter in A Dictionary of Economics ». Subjects: Social sciences — Economics. View all related items in Oxford Reference ». Search for: 'price-setter' in Oxford Reference ».
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Oxford Reference. They face a typically horizontal demand curve. This powerlessness means that selling one more unit would bring in marginal revenue exactly equal to the market price. Economic surplus is the difference between the reservation price highest price one is willing to pay and the marginal cost of a good.
Total economic surplus is the sum of total consumer surplus and total economic profit. List All Search. Instructor Log in. Student Log in.
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