What is the difference between a price taker and a price setter? A : The company
ID: 2473019 • Letter: W
Question
What is the difference between a price taker and a price setter?
A : The company sets the price for products from a price taker, and stockholders set the price for products from a price setter.
B : Stockholders set the price for products from a price taker, and the company sets the price for products from a price setter.
C : Stockholders set the price for products from a price taker, and the market sets the price for products from a price setter.
D : The market sets the price for products from a price taker, and the company sets the price for products from a price setter.
Explanation / Answer
Answer:
Correct Answer is D: The market sets the price for products from a price taker, and the company sets the price for products from a price setter.
Price taker --- The market sets the price for products from a price taker. IN this situation, the buying or selling by an investor has no effect on the market. Firms are not able to set their price.
Price Setter --- Firms are able to set their price for products.