Define firm as price taker, price discrimination,price differentiation
Answers
Explanation:
in perfect competition,a single firm unable to set its price because of high numbers of sellers so here it can only take price,not set.
Price discrimination is when firm sets price for a special group of consumers
A price taker refers to a firm in a market situation having no control or power over the market price.Price discriminating or price differentiating firm usually charges different prices to different customers based on their different willingness to pay for a product or service.
Explanation:
A price taking firm can be seen mostly in a perfectly competitive or competitive market structure.In such a market situation,high levels of market competition or rivalry prevents any individual firm to determine or control the market price for the product or service in concern.Therefore,the firms in competitive markets are price taker rather than price maker.
On the other hand,price discriminating or differentiating firm charges different price for different segments of consumers based on their and other demographic factors such as age,income,caste,religion etc.It implies that firms have some or absolute control or power over the market price.Price discriminating or differentiating firms can be seen in a oligopolistic or monopolistic market where market competition or rivalry is relatively lower.