Price+Taker

Price taker economics typically occurs in a perfect competion market type. The reason being is because in price taker economics, an individuals buying or selling in the market has no effect on the market as a whole. For example, if the market is selling greebes for 10 dollars and you are selling them for 29, you will have little to no effect on the market. This is because of the mass amount of markets in the industry, there is only one point in which you can be the most productively efficient. When one firm alters there price away from equlibrium, they will either be making less money by charging less or sell less by charging a higher quanity because of all the different options open for a buyer. In other markets price taker doesn't exist. In monopolies, the one large company controlling all of the market has complete influence on the market price because of lack of competition. Thats why price taker only applies to a perfect competition market. Despite price taker economics, there is a way for a firm to change the price. If they get together with other firms in their industry they can fix prices which in turn will lead to price change by the firms. This action is illegal yet hard to catch.

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Although it's hard to tell, this video describes a few people that try to raise the price of gas to make a profit, but there effects dont catch on to the market and they are unsuccesful and cant make there money back on gas.

http://www.answers.com/topic/market-power http://www.investopedia.com/articles/trading/121001.asp http://answers.yahoo.com/question/index?qid=20080116085057AAw3hQ2

If the equilibrium market price is 4 dollars a gallon for gas and you charge 3.50 will the price of gas go down? Answer: No