Dominant price leadership

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Reference no: EM1371837

Dominant price leadership exists when one company drives the others out of the market. The dominant firm decides how much each of its competitors can sell.

The dominant firm charges the lowest price in the industry.

The dominant firm establishes the price at the quantity where its MR = MC, and permits all other firms to sell all they want to sell at that price.

 

Reference no: EM1371837

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