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What is the difference between Price taker vs price setter?
Price setters are those companies that dictate the price its customers pay for goods and services. Pricetakers are those companies that cannot dictate their prices but their prices are dependent on the market.
Does monopolists differ from perfect competitors because monopolists makes a profit?
Not because of that reason but rather a result of the different characteristic of the two market structures. Basis of difference : MONOPOLY PERFECT COMPETITION 1) Number of producer 1 Many 2) Knowledge imperfect perfect 3) Price setter/taker setter taker 4) Nature of goods no substitute/ imperfect sub. homogeneous 5) Barriers to entry very high no 5) Factor mobility Factor immobility perfectly mobile 6) Profits in LR supernormal/normal normal
Which do you think a firm would prefer price setter or price taker?
They would prefer to be a price setter. This would imply control over the price. In some models this is a monopoly or an oligopoly. (As a side note, in the real world, EVERY firm has some control over the price of their good no matter how small that control may be, but this answer refers to models.) The technical reason for this is because in an economy in which firms are price takers, firms produce at the level where their Marginal Revenue equals Marginal Cost, but Marginal Revenue is set (it's the price. In a perfectly competitive economy it's also the minimum of the Average Variable Cost curve). So they can only vary their Marginal Cost by changing how much they produce. In a price setter economy, the price curve is changeable by the price setting. They will also produce where MR = MS, but they will produce a lesser quantity of goods because this artificial shortage will raise the price. This ALWAYS results in a higher profit than in a competitive economy.
Why producers are price takers and not price makers?
Producers are not strictly price-takers. Generally, the more competitive a market is, the less pricing power a firm has, and the more of a price-taker it is than a price-maker. Since basic economic analysis usually focuses on a perfectly competitive market, a producer is a price-taker because it cannot change its price from the equilibrium condition Price = Marginal Cost = Marginal Revenue because it will be undersold by its competitors if it raises it price.
A firm under a perfact competition is a price-taker not price-maker with examples?
it is a price taker because under perfect competition,price is determined by the market(through price mechanism:demand and supply) and not producer.this is because there are so many producers of the same product and all have the perfect knowledge of the market and there is only one buyer of that product,so no body can decide the price of the commodity on behalf of others.thats why a firm under perfect competition is a price taker and not a price maker. As part of the industry, the firm has to simply charge price determined by the industry. If the firm charges more price, it will lose sales and if it charges less price it will incur losses. The typical example of perfect competition is agriculture. The products are indistinguishable. There are many potential suppliers. This makes the farmer a price taker; if he or she prices the product higher than the market price, he or she will not make any sales or make fewer sales, thus incurring loss. Thus the farmer has to go with the price determined by the industry in order to survive
What is the difference between Price taker vs price setter?
Price setters are those companies that dictate the price its customers pay for goods and services. Pricetakers are those companies that cannot dictate their prices but their prices are dependent on the market.
What is the difference between a taker and a maker in the context of trading?
In trading, a "taker" is someone who accepts the current market price when buying or selling assets, while a "maker" is someone who sets their own price and waits for a trade to be matched at that price. Takers pay the market price, while makers create liquidity by providing options for others to trade at their specified price.
What is the difference between a maker and a taker in the context of trading?
In trading, a maker is someone who creates liquidity by placing orders on the market, while a taker is someone who accepts existing orders by trading at the market price. Makers typically pay lower fees than takers.
Does monopolists differ from perfect competitors because monopolists makes a profit?
Not because of that reason but rather a result of the different characteristic of the two market structures. Basis of difference : MONOPOLY PERFECT COMPETITION 1) Number of producer 1 Many 2) Knowledge imperfect perfect 3) Price setter/taker setter taker 4) Nature of goods no substitute/ imperfect sub. homogeneous 5) Barriers to entry very high no 5) Factor mobility Factor immobility perfectly mobile 6) Profits in LR supernormal/normal normal
What is the difference between TT and TC in railway?
TT is a ticket taker and TC is a ticket chaker
Which do you think a firm would prefer price setter or price taker?
They would prefer to be a price setter. This would imply control over the price. In some models this is a monopoly or an oligopoly. (As a side note, in the real world, EVERY firm has some control over the price of their good no matter how small that control may be, but this answer refers to models.) The technical reason for this is because in an economy in which firms are price takers, firms produce at the level where their Marginal Revenue equals Marginal Cost, but Marginal Revenue is set (it's the price. In a perfectly competitive economy it's also the minimum of the Average Variable Cost curve). So they can only vary their Marginal Cost by changing how much they produce. In a price setter economy, the price curve is changeable by the price setting. They will also produce where MR = MS, but they will produce a lesser quantity of goods because this artificial shortage will raise the price. This ALWAYS results in a higher profit than in a competitive economy.
What is the difference between taker and maker fees in trading platforms?
Taker fees are charged when you take liquidity from the market by placing an order that is immediately filled, while maker fees are charged when you provide liquidity to the market by placing an order that is not immediately filled.
What is the difference between a market maker and a market taker in the financial industry?
A market maker is a trader who provides liquidity by buying and selling securities, while a market taker is a trader who accepts the prices offered by market makers and executes trades based on those prices.
Why producers are price takers and not price makers?
Producers are not strictly price-takers. Generally, the more competitive a market is, the less pricing power a firm has, and the more of a price-taker it is than a price-maker. Since basic economic analysis usually focuses on a perfectly competitive market, a producer is a price-taker because it cannot change its price from the equilibrium condition Price = Marginal Cost = Marginal Revenue because it will be undersold by its competitors if it raises it price.
What is the difference between a maker fee and a taker fee in the context of trading?
A maker fee is charged when a trader adds liquidity to the market by placing a limit order that is not immediately filled, while a taker fee is charged when a trader removes liquidity by placing a market order that is immediately filled.
What is the difference between maker and taker fees in trading platforms?
Maker fees are charged to traders who provide liquidity to the market by placing limit orders that are not immediately filled, while taker fees are charged to traders who take liquidity from the market by placing market orders that are immediately filled.
A firm under a perfact competition is a price-taker not price-maker with examples?
it is a price taker because under perfect competition,price is determined by the market(through price mechanism:demand and supply) and not producer.this is because there are so many producers of the same product and all have the perfect knowledge of the market and there is only one buyer of that product,so no body can decide the price of the commodity on behalf of others.thats why a firm under perfect competition is a price taker and not a price maker. As part of the industry, the firm has to simply charge price determined by the industry. If the firm charges more price, it will lose sales and if it charges less price it will incur losses. The typical example of perfect competition is agriculture. The products are indistinguishable. There are many potential suppliers. This makes the farmer a price taker; if he or she prices the product higher than the market price, he or she will not make any sales or make fewer sales, thus incurring loss. Thus the farmer has to go with the price determined by the industry in order to survive
