The term price taker refers to a firm operating in a perfectly competitive market that must take the prevailing market price for its product. Read below about a perfectly competitive market.
What is a perfectly competitive market?
In economics, a perfect market is also known as an atomistic market. A effect competition is defined by several idealizing conditions, collectively called perfect competition, or atomistic competition.
Therefore, in such a market the price taker must take the prevailing market price its product.
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