Question

Which of the following is correct? Both purely competitive and monopolistic firms are "price takers." Both purely competitive and monopolistic firms are "price makers." A purely competitive firm is a "price taker," while a monopolist is a "price maker." A purely competitive firm is a "price maker," while a monopolist is a "price taker."

Answer 1

Answer:

"A purely competitive firm is a "price taker," while a monopolist is a "price maker".

Explanation:

Price takers are those organizations that do not have the ability to impact the market to generate fluctuations. This is the case of a purely competitive firm that markets its products at a price that helps maximize profit.

Price makers are those that make the market go, that is, they have significant lots larger than the queue at each price level. This is the case of monopolistic firms, capable of influencing the price of the product.