Explain the price leadership model under oligopoly.
Explain the price leadership model under oligopoly.
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Newton D
Price leadership is common in oligopolies, such as the airline industry, whereby a price leader sets the price and all the other competitors feel compelled to lower their prices to match.
manish1008
The collusive price-leadership model may emerge in an oligopoly as a result of an explicit or implicit agreement among a handful of dominant firms to keep their prices in mutual alignment. The smaller firms follow the price change initiated by the dominant firms.