Question

State with reason whether you agree or disagree with the following statement:

Seller is the price maker under perfect competition.

Answer 1

I disagree with the given statement.

Reason:

1. In a perfectly competitive market, there are large number of sellers. 
2. Each seller forms a negligible part of the entire market.
3. No single seller is in a position to influence the market price.
4. Sellers are said to be ‘price takers’ under perfect competition. 
5. In contrast, in monopoly market, there is only one seller who controls the entire market supply for a product which has no close substitute. Therefore, the seller is a ‘price maker’ in monopoly.