Asked by Jackson Levine on Jul 03, 2024
Verified
If a particular bank regularly announces changes in its interest rate schedules before its competitors, who then set rates very close to those announced by that bank, this could be described as
A) markup pricing.
B) predatory pricing.
C) price leadership.
D) explicit price collusion.
Interest Rate Schedules
Tables or charts detailing the interest rates applicable for various financial products or loans over time.
Markup Pricing
A pricing strategy where a fixed percentage is added to the cost of goods to cover expenses and profit.
- Investigate the behaviors and implications of oligopoly markets, with an emphasis on cartels, price leadership, and collusive practices.
Verified Answer
ZK
Zybrea KnightJul 06, 2024
Final Answer :
C
Explanation :
Price leadership occurs when one company, often the largest or most influential in an industry, sets prices that other companies in the market follow. In this scenario, the bank that announces its interest rates first and is then followed by its competitors is acting as a price leader.
Learning Objectives
- Investigate the behaviors and implications of oligopoly markets, with an emphasis on cartels, price leadership, and collusive practices.