price leadership

The setting of the price of a product by a dominant firm in an industry in the knowledge that competitors will follow this lead in order to avoid the high cost of a price war This practice is often found in oligopoly and has the effect of a cartel As the price leader is as anxious as the other members of the industry to achieve a stable market, it is in their interest to set the price at a sensible level; a price leader who fails to do so will soon be replaced as leader by another member of the group. Compare price ring

Big dictionary of business and management. 2014.

Look at other dictionaries:

  • price leadership — A price charged by the dominant producer that becomes the price adopted by all the other producers. Bloomberg Financial Dictionary * * * price leadership price leadership ➔ leadership * * * price leadership UK US noun [U] ► MARKETING the fact of… …   Financial and business terms

  • Price Leadership — When a firm that is the leader in its sector determines the price of goods or services. Price leadership can leave the leader s rivals with little choice but to follow its lead and match these prices if they are to hold onto their market share.… …   Investment dictionary

  • price leadership — noun : leadership by a dominant firm in the determination of prices in an industry with other firms following the pattern established by the leader * * * price leadership noun The establishment of the price of a commodity by the market leader • • …   Useful english dictionary

  • price leadership — Mktg the establishment of price levels in a market by a dominant company or brand …   The ultimate business dictionary

  • Price Leadership — ⇡ Preisführerschaft …   Lexikon der Economics

  • price leadership — / praɪs ˌli:dəʃɪp/ noun a situation where the producers model their prices on those of one leading producer …   Marketing dictionary in english

  • leadership — lead‧er‧ship [ˈliːdəʆɪp ǁ ər ] noun [uncountable] 1. the position of being the leader of a team, organization, country etc: • The company did well under the leadership of its founder, Haruo Suzuki. 2. the qualities needed in order to be a good… …   Financial and business terms

  • Price fixing — is an agreement between business competitors to sell the same product or service at the same price.In general, it is an agreement intended to ultimately push the price of a product as high as possible, leading to profits for all the sellers.… …   Wikipedia

  • price — The cost at which something is obtained. Something which one ordinarily accepts voluntarily in exchange for something else. The consideration given for the purchase of a thing. Amount which a prospective seller indicates as the sum for which he… …   Black's law dictionary

  • price ring — A group of firms in the same industry that have agreed amongst themselves to fix a minimum retail price for their competing products, thus forming a cartel Price rings are illegal in many countries unless they can be shown to be in the public… …   Big dictionary of business and management

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