prisetaker

Prisetaker is a term used in economics to describe an agent that accepts the market price as given and cannot influence it. In perfect competition, individual buyers and sellers are prisetakers, since products are homogeneous, many participants exist, and there are no barriers to entry or exit. As a result, no single actor can affect the market price, and each firm faces a horizontal demand curve at the prevailing price.

In such a setting, a prisetaker maximizes profit by choosing output where marginal cost equals the market price (MR = MC, with MR = P for a firm facing perfect competition). If price falls short of average total cost in the short run, some firms may exit; in the long run, entry and exit drive profits toward zero, and price tends toward the minimum point of average total cost in many models. The concept emphasizes that the price is determined by overall supply and demand in the market, not by the individual undertakings of a single actor.

The term is commonly used as “price taker” in standard English, while “prisetaker” appears in some translations or discussions in other languages or contexts. The concept contrasts with price makers, such as firms in monopolies or monopolistic competition that can influence price through market power. See also price maker, perfect competition, market structure, supply and demand, marginal cost.