Two market situations in which there is a clear reason for a price leader's identity are the efficient firm case and the dominant firm case.

Question

Quizplus · Accepted Answer

In the efficient firm case, the price leader is typically the most efficient firm in the market, while in the dominant firm case, the price leader is the dominant firm with the largest market share. Therefore, there is a clear reason for the price leader's identity in both cases.

Two Market Situations in Which There Is a Clear Reason