Economics Oligopoly Questions
Price leadership in oligopoly refers to a situation where one dominant firm in the market sets the price, and other firms in the industry follow suit. The price leader typically has a significant market share and is considered to be the most influential player in determining market prices. Other firms in the oligopoly observe and react to the price changes made by the price leader, adjusting their own prices accordingly. This form of pricing strategy is often seen in industries where there are a few large firms that have a considerable impact on the market.