Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration


Horngren'S Financial And Managerial Accounting
Found in: Page 1406

Short Answer

Question: Explain the difference between price-takers and price-setters.


Price-takers are the companies who accept the prices as per market competition. In contrast, price-setters are companies that control the price setting of their products and services.

See the step by step solution

Step by Step Solution

Step 1: Meaning of Price

The term price refers to the quantity of money exchanged when commercial activities occur in an economy. In other terms, prices are the payments made or received in exchange for goods or services.

Step 2: Difference between price-takers and price-setters

A company is said to be a price-taker if it holds no control over the prices of its goods or services and is bound to accept the prices set by the market.

At the same time, a company is said to be a price-setter when it holds control over the prices of its products or services. In other terms, when a company holds rights to determine the prices, to some extent, it becomes a price-setters.

Most popular questions for Business-studies Textbooks


Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.