During certain periods in the past few decades, if one of the three major breakfast cereal producers in the United States announced a price increase, the other two announced a similar price increase.This is a good example of

Question

Quizplus · Accepted Answer

The behavior described in the question is a good example of the price leadership model of oligopoly. In this model, one dominant firm (in this case, one of the three major breakfast cereal producers) sets the price for the market and the other firms (the other two major breakfast cereal producers) follow suit with similar price increases. This is common in oligopolistic markets, where a small number of firms dominate the market and their actions often have a significant impact on the industry as a whole.

During Certain Periods in the Past Few Decades, If One