A market structure in which there is one large firm that has a major share of the market and many smaller firms supplying the remainder of the market is called:
A) the Stackelberg Model.
B) the kinked demand curve model.
C) the dominant firm model.
D) the Cournot model.
E) the Bertrand model.

Question

Quizplus · Accepted Answer

The dominant firm model describes a market structure where there is one large firm, referred to as the dominant firm, that has a major share of the market and sets the price for the entire industry. The remaining smaller firms act as price takers and supply the remainder of the market. The Stackelberg model describes a market structure where there are two firms, with one firm being the leader that sets its output first, and the other firm being the follower that reacts to the leader's output. The kinked demand curve, Cournot, and Bertrand models do not involve a dominant firm.

A Market Structure in Which There Is One Large Firm