Explain the terms "price taker" and "price maker," and discuss how they relate to the consumer

Price maker refers to the industry or a firm in the market with market power, hence controlling and influencing how the products' cost will be. The price set is usually the firm's price. The example of a market structure that is price-makers are oligopoly and monopoly market.

Price takers refer to the party in the market structure who have no option but to take the already set market prices. An example of a market regarded as price takers is a perfectly competitive market.

Relationship between 'price taker 'and 'price maker' and consumer

Price takers have to adhere to the current market price since they have no option to cause an influence. However, if they decide to hike their cost, all the consumers will opt to buy from other dealers at a lower-cost since, in the market, commodities or services are identical.

The price maker can cause changes in the current price of the product in the market. Even if they decide to hike the prices, their relationship with the customer will still be intact since the customer has no option other than to pay for the goods and services. The reason price-makers cannot lose the customers because they deal with commodities that have no close substitute. Only the government can help control such consumer exploitation.