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Oligopoly Strategies What is the definition of Price Leadership? What is an example of it? What...

Oligopoly Strategies

What is the definition of Price Leadership? What is an example of it?

What is the definition of Kinked Demand Curve? What is an example of it?

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Answer ) Price leadership-A large firm is the dominant firm (high market share) for the product can resort to price leadership, i.e., the large firm fixes the price and other small firms act as Price-takers. Example: SAIL vis-a-vis TISCO in Steel Sector.

Answer) kinked demand curve-A kinked demand curve occurs when the demand curve is not a straight line but has a different elasticity for higher and lower prices. One example of a kinked demand curve is the model for an oligopoly. ... The kink in the demand curve occurs because rival firms will behave differently to price cuts and price increases.

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