Multiple Choice
What is the potential drawback if firms follow a price leadership model in an actual market?
A) The price leader's behavior may be interpreted as collusion and be subject to antitrust sanctions.
B) Excessive price signalling may force all of the firms to adopt price-taking strategies, which reduces overall profits among the firms.
C) Disputes about which firm should be the price leader may lead to price wars.
D) Signalling efforts increase the firms' fixed costs of production.
Correct Answer:
Verified
Correct Answer:
Verified
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