Question

What is the difference between firms that are price takers and those that are price searchers?

Answer 1

1.The firm that are price taker are generally competitive markets because in that market the price is decided by the market forces ,that is demand and supply in the market and sellers cannot cannot control the price .

The other reason is that homogeniety of the product in competitive market.

2.price searchers come under the Monopoly market who are sets the price of the good because they are only Sellers in the market .

the barriers to entry and exit is also difficult in this type of market.

In price searching category, sometime oligopoly firms also come under it because they are the few sellers in tge markets with large number of buyers.

They control the price by forming the cartels.

the best example is oil and petroleum exporting countries(OPEC)