The price leadership model that applies when the largest firms set industry pricing patterns is the ________ model.

Question

Quizplus · Accepted Answer

The dominant firm model applies when the largest firms in the industry (the dominant firms) are able to set industry pricing patterns and the smaller firms follow their lead. This occurs when the dominant firms have significant market power and their pricing decisions influence the overall market price.

The Price Leadership Model That Applies When the Largest Firms