Asked by Shanda Mckinney on Jun 09, 2024
Verified
The Orlando,Florida,theme park industry tends to follow a price leadership model.This means that:
A) each theme park sets its own price and operating hours independent of what other parks do.
B) Disney often sets a price and rival theme parks then follow with similar if not identical prices.
C) Disney often sets prices only to be undercut by rival firms who prefer to engage in price wars.
D) firms use explicit written agreements to charge identical prices.
Price Leadership
A strategy where the leading firm in a market sets the price of goods or services, and other firms in the market follow suit.
Theme Park Industry
The theme park industry comprises companies and entities that operate amusement and theme parks, offering rides, games, shows, and other entertainment activities.
- Uncover and appraise the strategies companies use in markets characterized by oligopoly, including engaging in collusion, competing without altering prices, and establishing price leadership.
Verified Answer
JS
Janvi SharmaJun 11, 2024
Final Answer :
B
Explanation :
The statement "Orlando, Florida, theme park industry tends to follow a price leadership model" suggests that one park, usually Disney, sets a price and other theme parks follow with similar or identical prices. This is known as price leadership where one firm (the leader) sets the price and other firms follow suit. Therefore, option B is the best choice. The other options do not align with the concept of price leadership.
Learning Objectives
- Uncover and appraise the strategies companies use in markets characterized by oligopoly, including engaging in collusion, competing without altering prices, and establishing price leadership.
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