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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.
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Competitive firms are assumed to do what?
Be price takers.
Buyers and sellers who have no influence on market price are referred to as what?
They are referred to as price takers.
How does the controller of a monopoly set price of goods?
the monopolist produces at a point where marginal revenue=marginal cost, he uses this quantity, and goes up vertically until the demand curve is met. This quantity is lower than a competitive equilibrium and thus, price is higher as well.
Which of these statements refers to the law of supply?
producers will supply as the good price Producers will supply more of a product as the price goes up. A+
Are market pawns people who have no influence on market prices?
Price Takers have no influence on market.
What rhymes with lakers?
takers, bakers, makers
Competitive firms are assumed to do what?
Be price takers.
Buyers and sellers who have no influence on market price are referred to as what?
They are referred to as price takers.
What rhymes with takers?
Bakers,makers, and so on, just use the alphabet and replace the first letter with the t...
What are the producers of DNA testing?
Genetic makers are the structural differences in DNA that are the producers of the DNA testing.
What rhymes with acres?
Raker. You know like I am a raker. Rake leaves.
How does the controller of a monopoly set price of goods?
the monopolist produces at a point where marginal revenue=marginal cost, he uses this quantity, and goes up vertically until the demand curve is met. This quantity is lower than a competitive equilibrium and thus, price is higher as well.
Which of these statements refers to the law of supply?
producers will supply as the good price Producers will supply more of a product as the price goes up. A+
Are market pawns people who have no influence on market prices?
Price Takers have no influence on market.
What word means the amount producers will make for a certain price?
Price
What word means the amount of producers will make for a certain price?
Price
How do firms price their goods?
The pricing of goods is largely determined by the presence or absence of competition. Though Cartels will diminish the competition.In general producers can be grouped as price-takers or price-makers. De Beers for example, who essentially control the supply of diamonds to the market, use marketing to set a high value on the product, and thus enhance the value of their product. For gemstones have little real value, other than that given by vanity. So they are price-makers.Industrial diamonds on the other hand are raw material essential to industrial manufacturing, but there are some competitors for these processes. Boron nitride (BN) for example may be of similar hardness to diamond, but has a higher working temperature limit. [Curiously, like carbon, BN can be formed at will as a soft lubricant similar to graphite, or as a hard material similar to diamond. One form may be harder than diamond.]So for some uses, the price should not be set too high, for that would encourage the production of substitutes, for which economies of scale may eventually disadvantage diamond.This is an exotic example of price setting, but illustrates the mechanisms.Price-takers, are usually producers of commodity goods such as potatoes or rice, and there are plenty of competitive producers. In this case, the market price is set by the buyers who are only prepared to pay a certain price. And even that price is subject to competition from substitute products.In any market, life is more pleasant when producing and selling high quality products, not commodity products.
