Ihere are variois 10tm o price leadership by low cost firm price leadership by a large (dominant) firm barometric price leadership

Rucha rajesh shingvekar

the low-cost price leadership model, an oligopolistic firm having lower costs than the other firms sets a lower price which the other firms have to follow. Thus the low-cost firm becomes the price leader. The most common example of price leadership in an industry when a large business in an industry where their only competition is small business. The large business can lower prices as much as they want without worrying about getting into a losing price war with their rivals. The dominant price leadership model occurs when one firm controls the vast majority of the market share in its industry. Within the industry, there are other, smaller firms that provide the same products or services as the leading firm. ... A dominant price leadership model is sometimes referred to as a partial monopoly. small firms follow the price of the dominant firms, so they are not engaged in a price war in order to gain market share, which reduces the profitability. . The barometric price leadership model occurs when a particular firm is more adept than others at identifying shifts in applicable market forces, such as a change in production costs. This allows the firm to respond to market forces more efficiently. For instance, the firm may initiate a price change. For example, a firm in the steel industry may be agreed as the (barometric) leader for price changes in the motor-car industry. Barometric price leadership may be established for various reasons. Firstly, rivalry between several large firms in an industry may make it impossible to accept one among them as the leader.