If there is a buyer or a seller who has a good control over the market that he can influence the change in the price of that item, he is called as the price maker. In case of the selling side, monopoly would be a good example. In case of the buying side, the best example would be that of monopsony. These are the two good ways of explain the concept of price makers in the market. They are also called as the price setters. The other concept that exists is the price takers.
It is the market control that is essential in case of the price makers. In case of the buyers who are having a control in the market, the demand curve would be negatively sloped. It would be possible to take any price-quantity combination on the curve. In case of the seller, the supply curve would be a positively sloped one. It also has the possibility to take any price-quantity combination on the curve.
The seller's’ side
In case of the selling side, monopoly is something that is deciding the prices. It would be the best price maker. As it is the only seller in the whole market, it would have command over the prices that it would set. The people who are in need of it would have to buy the product without any other way. Even the firms that are oligopolistic or under monopolistic competition are included under the price makers. But that would be only up to a certain degree. It would depend on how far they have a control over the market.
The buyers’ side
In this the best example for the price makers would be monopsony. There are other examples woo. They would be the oligopsony and monopsonistic competition. They may not be doing it to that great an extent as in the case of monopsony. This is so because in the case of monopsony, they are the only buyers in the market. If they are ready buy they will. In case they find the price to be too high, they would not. In that case the sellers will try to reduce the price in order to let their only customer to buy the product from them.
Though the price maker has the capacity to control the prices in the market, he cannot do it completely. It is not possible for any quantity for any object, but for certain quantities for a certain object only.