In oligopolistic industries that sell a commodity,firms base their prices largely on competitors' prices.This is an example of ________.
A) EDLP
B) countertrade
C) price discrimination
D) going-rate pricing
E) high-low pricing

Question

Quizplus · Accepted Answer

The pricing strategy described is called going-rate pricing, where firms set their prices based on the prevailing market price, usually that of their competitors. This is common in oligopolistic industries where there are only a few dominant players in the market selling a commodity product. The other options listed are not applicable in this scenario - EDLP (Everyday Low Pricing) is when retailers offer low prices consistently, countertrade is a practice of trading goods or services for other goods or services rather than using money, and price discrimination and high-low pricing both involve setting different prices for different customers or at different times.

In Oligopolistic Industries That Sell a Commodity,firms Base Their Prices