What is price leadership?
What will be an ideal response?
Price leadership is a form of oligopoly in which one dominant firm sets prices and all the smaller firms in the industry follow its pricing policy.
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The assumption that a perfectly competitive industry has many sellers, each selling an identical product, leads to the conclusion that
A) consumers get to see a variety of outputs. B) there are many buyers. C) the economic profit will be positive in the long run. D) firms are price takers.
Which of the following is TRUE of a natural monopoly?
A) Its long-run average cost curve slopes upward as it intersects the demand curve. B) Economies of scale exist to only a very low level of output. C) Economies of scale allow one firm to supply the entire market at the lowest possible cost. D) The firm is not protected by any barrier to entry.