Price Maker

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DEFINITION

A monopoly or a firm within monopolistic competition that has the power to influence the price it charges as the good it produces does not have perfect substitutes.

INVESTOPEDIA EXPLAINS

A monopoly is a price maker as it holds a large amount of power over the price it charges.

A price maker that is a firm within monopolistic competition produces goods that are differentiated in some way from its competitors' products. This kind of price maker is also a profit-maximizer as it will increase output only as long as its marginal revenue is greater than its marginal cost, in other words, as long as it's producing a profit.


RELATED TERMS
  1. Monopsony

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  2. Monopoly

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  3. Price-Taker

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  4. Monopolistic Competition

    A type of competition within an industry where: 1. All firms produce similar ...
  5. Predatory Dumping

    A type of anti-competitive event in which foreign companies or governments price ...
  6. Bilateral Monopoly

    A market that has only one supplier and one buyer. The one supplier will tend ...
  7. Price Rigging

    An illegal action performed by a group of conspiring businesses that occurs ...
  8. Marginal Rate of Technical Substitution

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