The proper role of a price leader is to
A) set prices that reflect the firm's cost advantages.
B) set prices to reflect market conditions, without disrupting the marketplace.
C) set long-term industry prices that require a minimum of change in the future.
D) establish industry prices that maximize the leader's long-term sales and profits.

Question

Quizplus · Accepted Answer

A price leader should set prices to reflect market conditions, without disrupting the marketplace. This is because the price leader's prices will have a significant impact on the prices of other firms in the industry, and it is important to avoid setting prices that are too high or too low.

The Proper Role of a Price Leader Is to