Which of the following best describes a price setter?
A) firms in perfect competition
B) pricing of products that are not standardized
C) firms setting prices equal to the market price
D) firms setting price equal to the aggregate price level

Question

Quizplus · Accepted Answer

A price setter is a firm that has the power to set the price of its product, rather than taking the market price. This is often the case for products that are not standardized, as they do not have direct substitutes and consumers may be willing to pay a higher price for certain features or quality. Firms in perfect competition do not have the power to set prices, and setting prices equal to the market price or aggregate price level does not necessarily imply price-setting power.

Which of the Following Best Describes a Price Setter