What are the pros and cons of being a price taker or a price maker?
In microeconomics, price takers and price makers are two types of firms that face different market conditions and have different impacts on the market price and output. A price taker is a firm that has no control over the market price and has to accept the prevailing price as given. A price maker is a firm that has some degree of market power and can influence the market price by adjusting its output. What are the pros and cons of being a price taker or a price maker? Let's explore some of the advantages and disadvantages of each scenario.