For a time,either R.J.Reynolds or Phillip Morris raised prices of cigarettes twice a year by about 50 cents per carton.The other firms in the industry raised their prices by the same amount.Economists call this:

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Price leadership refers to a situation where one firm in an industry sets the price, and other firms follow suit by adjusting their prices accordingly. In this scenario, either R.J. Reynolds or Phillip Morris sets the price twice a year, and the other firms in the industry follow suit by raising their prices by the same amount. This is not a case of predatory pricing or a price war, as all firms in the industry are raising prices in unison. Similarly, this is not an example of producer sovereignty, as the firms are not independently setting prices but are instead following the lead of one firm.

For a Time,either R