Competitive firms are price takers largely because of intensive advertising by their competitors.

Competitive Firms

Refers to companies operating in a market where there are many sellers and buyers, products are similar, and there is free entry and exit from the market.

Price Takers

Describes individuals or companies that accept the market price as given, without having the influence to alter the price of the good or service they are selling or buying.

Advertising

A marketing communication that employs an openly sponsored, non-personal message to promote or sell a product, service, or idea.