Microsoft sets prices for its new line of computers,and Dell and HP follow.This practice is known as:
A)antitrust pricing.
B)price extortion.
C)price leadership.
D)kinked demand behavior.

Question

Quizplus · Accepted Answer

The practice described is called price leadership. This is when a dominant firm (in this case, Microsoft) sets prices and other firms in the market (Dell and HP) follow suit. This is often done in industries where products are standardized or where the dominant firm has a significant market share.

Microsoft Sets Prices for Its New Line of Computers,and Dell