Companies tend to be price-setters when there is less competition.

Question

Quizplus · Accepted Answer

When there is less competition in the market, companies have more control over price setting and can often set higher prices without fear of losing customers to competitors. This is known as price-setting power or pricing power. Conversely, when there is intense competition in a market, companies become price-takers and must adjust their prices to match the prevailing market price or risk losing market share.

Companies Tend to Be Price-Setters When There Is Less Competition