Which of the following is an example of a price taker?

• A. Auto manufacturers.
• B. Pharmaceutical firms.
• C. Miners and oil & gas companies.
• D. Accounting firms.

Answer: (C)

Price takers accept the going market price as given because no single firm can influence it. This happens when many producers offer essentially the same product, so the price is determined by overall market supply and demand rather than by any one company. Miners and oil and gas producers fit this description because their outputs are commodities traded globally; a single firm’s production is a tiny share of the world supply, so the price is set by the market, not by the firm. In contrast, auto manufacturers sell differentiated products and can influence prices through features and branding; pharmaceutical firms often have patent-protected drugs that grant pricing power; and accounting firms compete on services and reputation, giving them more ability to set fees.