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CAPITAL: One of the four basic categories of resources, or factors of production. It includes the manufactured (or previously produced) resources used to manufacture or produce other things. Common examples of capital are the factories, buildings, trucks, tools, machinery, and equipment used by businesses in their productive pursuits. Capital's primary role in the economy is to improve the productivity of labor as it transforms the natural resources of land into wants-and-needs-satisfying goods.
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                           PRICE TAKER: A buyer or seller that has no market control and is not able to affect the price of a good. It must "take" or accept the going market price. The market structure that exemplifies price taker is perfect competition. In fact, perfect competition is the only example of price taker. This is one of two alternatives related to control over price. The other is price maker. Price taker is also termed price seeker. The lack of market control is what creates a price taker. A buyer or seller that has NO market control must accept the existing market price when buying or selling a good. It has no choice. Pay the going price and buy the good. Do not pay the going price and do not buy the good. Accept the going price and sell the good. Do not accept the going price and do not sell the good. For a price taker, no other options exist.Perfect competition is THE example for pricer taker because it contains a relatively large number of participants that trade an identical product. Participants are free to enter and exit the market and everyone has complete knowledge of all prices. Each buyer competes against thousands, hundreds of thousands, or even millions of other buyers when they seek to purchase a good. Each seller competes against thousands, hundreds of thousands, or even millions of other sellers when they seek to sell a good. Sellers do not sell to a buyer trying to pay less than going market price, because thousands, or even millions of other buyers are willing and able to pay the going price. Buyers do not buy from a seller trying to charge more than going market price, because thousands, or even millions of other sellers are willing and able to charge the going price. Each participant is an insignificant part of the overall market. Should a given buyer decide to buy more or less or nothing at all, the market is unaffected. Should a given seller decide to sell more or less or nothing at all, the market is unaffected. Price-taking buyers and sellers face perfectly elastic demand and supply curves. For example, a perfectly competitive seller faces a perfectly elastic demand curve, one that is horizontal at the market price. It can sell any quantity that it wants at the going market price. A perfectly competitive buyer faces a perfectly elastic supply curve, one that is horizontal at the market price. It can buy any quantity that it wants at the going market price. Facing a constant market price and perfectly elastic demand or supply curve means that price takers efficiently allocate resources. The value of goods produced is equal to the value of goods not produced.
 Recommended Citation:PRICE TAKER, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: July 11, 2025]. Check Out These Related Terms... | | | | | | | | | | | | Or For A Little Background... | | | | | | | | | | | | And For Further Study... | | | | | | | | | | | |
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Junk bonds are so called because they have a better than 50% chance of default, carrying a Standard & Poor's rating of CC or lower.
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"If anything terrifies me, I must try to conquer it. " -- Francis Charles Chichester, yachtsman, aviator
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