When the sale of a firm's total output of a product in a purely competitive product market has no effect on the market price, this makes the firm a price taker.
An individual or business that must accept market prices because it lacks the market share to do so on its own is known as a price-taker.
The majority of manufacturers are also price takers because of market rivalry.
Price-setting only occurs in monopolistic or monopsonistic environments.
Prices for financial products like stocks are established by market makers. Market participants, however, are also competing with one another for trade.
Hence, When the sale of a firm's total output of a product in a purely competitive product market has no effect on the market price, this makes the firm a price taker.
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