ABSTRACT
THE price maker’s problem is entirely different from that of the price taker. For the price maker is in no position to decide on the volume of his sales or purchases; he must let that be determined by the price takers who compose his market; and accordingly, he must expect his volume of transactions to vary with changing market conditions. But while he has no direct control over his rate of transactions, he sets the terms on which he offers to transact business; and he will try to set them in a way that will maximize his profit. In other words, while the price taker decides on the quantity he is going to buy or sell, the price maker offers to buy or sell undetermined quantities on his own terms.
