Price Maker


DEFINITION of 'Price Maker'

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.


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.

  1. Monopolistic Competition

    A type of competition within an industry where: 1. All firms ...
  2. Price-Taker

    1. An investor whose buying or selling transactions are assumed ...
  3. Predatory Dumping

    A type of anti-competitive event in which foreign companies or ...
  4. Monopsony

    A market similar to a monopoly except that a large buyer not ...
  5. Bilateral Monopoly

    A market that has only one supplier and one buyer. The one supplier ...
  6. Monopoly

    A situation in which a single company or group owns all or nearly ...
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  1. What are the characteristics of a monopolistic market?

    A monopolistic market is a market structure that has the characteristics of a pure monopoly. A monopoly exists when there ... Read Full Answer >>
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  3. What is the utility function and how is it calculated?

    In economics, utility function is an important concept that measures preferences over a set of goods and services. Utility ... Read Full Answer >>
  4. What does marginal utility tell us about consumer choice?

    In microeconomics, utility represents a way to relate the amount of goods consumed to the amount of happiness or satisfaction ... Read Full Answer >>
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