ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Price leadership occurs when a leading firm in a given industry is able to exert enough influence in the sector that it can effectively determine the price of goods or services for the entire market.

Detailed explanation-2: -Oligopolists seek to maximize market profits while minimizing market competition through non-price competition and product differentiation. read more. That is, there should be very few firms in the market. One firm among them should be big enough to control the price.

Detailed explanation-3: -Understanding Oligopolies Firms in an oligopoly set prices, whether collectively-in a cartel-or under the leadership of one firm, rather than taking prices from the market. Profit margins are thus higher than they would be in a more competitive market.

Detailed explanation-4: -It is quite common in a homogeneous market where there is little to no difference between services and products offered by organizations operating in that market. The price leadership model is commonly seen in an oligopolistic market, such as airlines, where competition is low.