A form of oligopoly in which ________ is called the price-leadership model.
A) all firms collude when setting the price
B) price is set by government regulation
C) price is determined by the market
D) a dominant firm sets the price and all smaller firms in the industry follow the dominant firm's pricing policy

Question

Quizplus · Accepted Answer

The price-leadership model refers to a situation where a dominant firm in an oligopoly sets the price for its products or services, and the other, smaller firms in the industry follow suit, adopting the pricing policy established by the dominant firm. This model does not involve explicit collusion among firms or government regulation of prices; rather, it relies on the market influence of the leading firm.

A Form of Oligopoly in Which ________ Is Called the Price-Leadership