Final answer:
Big box retailers like Lowe's are considered price takers because they have no control over the price of their products and must accept the prevailing equilibrium price in the market. They have to constantly monitor the market and adjust their prices to remain competitive.
Step-by-step explanation:
In economics, firms in a perfectly competitive market are called price takers. This means that they have no control over the price of their products and must accept the prevailing equilibrium price in the market. Big box retailers such as Lowe's are considered price takers because they operate in a highly competitive market where they have little influence over the price of the products they sell.
For example, if Lowe's were to raise the price of a particular product, customers could easily switch to a competitor like Home Depot or Amazon, resulting in a loss of sales for Lowe's. In order to remain competitive, big box retailers have to constantly monitor the market and adjust their prices accordingly.
Being a price taker also means that big box retailers have to focus on other strategies to differentiate themselves from their competitors, such as offering a wide product selection, providing excellent customer service, or implementing effective marketing campaigns.