A perfectly competitive firm is a price taker, but a monopoly is a price maker.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms have no control over the market price and must accept the prevailing price determined by the market forces of supply and demand. On the other hand, a monopoly has the power to influence or set the market price as it is the only seller of a particular product or service. Therefore, a monopoly is a price maker.

A Perfectly Competitive Firm Is a Price Taker, but a Monopoly