A large oligopolistic firm that unilaterally makes changes in price which competitors tend to follow is known as a:

Question

Quizplus · Accepted Answer

A price leader is a large firm in an oligopoly market that sets the price for its products, and other firms in the market follow the lead of the dominant firm. The price leader is expected to have market power, and its pricing strategy affects the overall market price. Hence, the best choice in this scenario is option A, price leader. Option B (price maker) is a term used to describe a firm that has complete control over the price of its products, which is not necessarily the case in an oligopoly market. Option C (dominant strategy firm) and option D (cartel leader) are not accurate descriptions of a large oligopolistic firm that unilaterally sets the price for its products.

A Large Oligopolistic Firm That Unilaterally Makes Changes in Price