Provide real examples of perfect competitive and monopoly markets, and explain how these firms are price takers and price makers

Because there are many firms and each firm sells an identical product in perfectly-competitive markets, the price is determined by the market as a whole and each firms sells their output at the market price. Therefore, all firms in these markets are "price takers." One example of a perfectly competitive market is the market for wheat. In this market, there are many sellers and all wheat is typically the same. Therefore, all wheat farmers receive the same amount per unit of wheat sold. Another example is the white sugar market. Consumers aren't willing to pay different prices for different brands of sugar, so the price is set by the market.

Monopolies, on the other hand, face no competition, and are able to set the price at whatever they want to. Therefore, these firms are "price makers." Monopolies arise because there is some barrier to entry that prevents all other firms from entering the market. For example, many pharmaceuticals are monopolies because patents prevent any new firms from entering the market. Monopolies can also arise because there are significantly high fixed or startup costs that prevent more than one firm from entering the market. This is very common in the energy delivery and cable television industries.