Limit pricing by a price leader in an oligopoly refers to the strategy of setting a price
A) that blocks the entry of new firms.
B) that ensures profits for the least efficient existing firm in the oligopoly.
C) that maximizes profits for all firms in the oligopoly market.
D) that maximizes profits for the price leader, but not necessarily for the other firms.

Question

Quizplus · Accepted Answer

Limit pricing is a strategy where the price leader sets a price low enough to deter entry by potential competitors, thus blocking new firms from entering the market.

Limit Pricing by a Price Leader in an Oligopoly Refers