During the 1990s, one of the dominant firms in the U.S. cigarette industry would raise prices once or twice a year by about 50 cents per carton. Other firms in the industry typically raised their prices by the same amount. This is an example of:

Question

Quizplus · Accepted Answer

This is an example of price leadership, where one dominant firm in the industry sets the price and other firms follow suit by also raising their prices by the same amount. This indicates that the dominant firm has significant market power and can influence pricing in the industry.

During the 1990s, One of the Dominant Firms in the U.S