The oligopoly model that is most appropriate when one large firm usually takes the lead in setting price is the ________ model.
A) Cournot
B) Stackelberg
C) game theory
D) prisoner's dilemma

Question

Quizplus · Accepted Answer

The Stackelberg model is most appropriate when one large firm takes the lead in setting price. In this model, the leader sets their price and the follower firms then react accordingly, resulting in a dominant firm setting the overall market price. The Cournot model assumes that firms compete on output rather than price, while game theory and prisoner's dilemma are broader frameworks for analyzing strategic behavior in various types of situations.

The Oligopoly Model That Is Most Appropriate When One Large