Under perfect competition, the seller is a price taker and under monopoly, he is price maker. Explain.
Under perfect competition, the price is determined by the industry because there are large number of sellers of homogeneous product. No single seller by changing the supply can influence the price. So, the firm is a price taker.
A monopolist is a single seller and determines the price himself. He is a price maker. There is no challenge to his price decisions as there are no other firms in the market and there are no close substitutes of his product. Barriers to entry of new firms further strengthen his position as a price maker.