Price Maker
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. Investopedia Says:
A monopoly is a price maker as it holds a large amount of power over the price it charges.
A price maker that is a firm within monopolistic competition produces goods that are differentiated in some way from its competitors' products. This kind of price maker is also a profit-maximizer as it will increase output only as long as its marginal revenue is greater than its marginal cost, in other words, as long as it's producing a profit. Related Terms:
Bilateral Monopoly
Monopolistic Competition
Monopoly
Monopsony
Predatory Dumping
Price Rigging
Price Taker |