Price-Taker

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DEFINITION of 'Price-Taker'

1. An investor whose buying or selling transactions are assumed to have no effect on the market.

2. A firm that can alter its rate of production and sales without significantly affecting the market price of its product.

BREAKING DOWN 'Price-Taker'

1. In the context of the stock market, individual investors are price-takers.

2. Suppose you sell water, which of course is supplied by millions of other places, including the sky. If you decide to set the price of a gallon of your water at $10, you will likely sell nothing because this commodity is readily available elsewhere for a much cheaper price.

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