American Building Products is the largest cement company in the Midwest. When the firm raised its prices by 8 percent, all of its competitors soon announced they too were raising their prices by 8 percent. It appears this industry is influenced by a ________ strategy.
A) price skimming
B) price leadership
C) market pricing
D) price discrimination

Question

Quizplus · Accepted Answer

The actions of American Building Products indicate that they are utilizing price leadership, as they raised their prices first and the competitors followed suit with the same percentage increase. This suggests that the competitors are looking to American Building Products to set the price for the industry.

American Building Products Is the Largest Cement Company in the Midwest