price leader

(redirected from Leader, Price)

Price Leader

A company that sets a price for a product and whose market share and/or brand loyalty is so strong that other companies are compelled to match or beat the price. The company that first changes the price is said to show price leadership.

price leader

a FIRM that establishes the market PRICE for a good or service and initiates price changes that are then followed by competing suppliers. Two kinds of price leader have been identified:
  1. DOMINANT FIRMS that are able to secure compliance to their prices by smaller rivals because of their powerful positions in the market;
  2. barometric price leaders whose price changes are accepted by other suppliers because of their recognized adeptness at establishing prices fully reflective of changing market conditions.

Price leader-follower relationships are a typical feature of OLIGOPOLY markets in coordinating price changes and tend to result in a strong degree of PRICE PARALLELISM. See PRICE LEADERSHIP.

Mentioned in ?
References in periodicals archive ?
The 21-year-old offered a flawless closing round of sevenunder-par 65 which took him to 19-under for the week and he was a shot too good for Poulter and four ahead of the overnight leader, Price.