Author Question: The price-leadership model does notassume the (Read 56 times)

Yi-Chen · **on:** Apr 19, 2019

Question 1

A form of oligopoly in which a dominant firm sets the price and all smaller firms in the industry follow the dominant firm's pricing policy is called

◦ the Cournot model.
◦ the contestable markets model.
◦ a cartel.
◦ the price-leadership model.

Question 2

The price-leadership model does
not assume the

◦ demand elasticity in response to an increase in price is different from the demand elasticity in response to a price cut.
◦ industry is made up of one large firm and a number of smaller, competitive firms.
◦ dominant firm maximizes profit.
◦ dominant firm allows the smaller firms to sell all they want at the price the leader has set.

InfiniteSteez · **Reply #1 on:** Apr 19, 2019

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