An oligopoly with a dominant price leader will produce a level of output between that which would prevail under competition and that which a monopolist would choose in the same industry.

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In an oligopoly with a dominant price leader, the leading firm often sets prices that other firms follow, resulting in a level of output and prices that are higher than in a competitive market but lower than what would be observed under a monopoly. This is because the dominant firm has significant market power but still faces some competition from other firms, leading to a compromise between competitive and monopolistic outcomes.

An Oligopoly with a Dominant Price Leader Will Produce a Level