Question

When most cars sold in the United States were produced by the Big Three auto companies, General Motors would announce its prices for the new model year first and then the other companies would match it. This practice was an example of:

Answer 1

Answer: Price leadership    

Explanation: In simple words, under price leadership strategy the dominant firm in the industry sets the prices for their products in the first place and then after that the other competing firms sets their prices following that dominating firm.

In the given case, the general motors is practicing price leadership as they are setting the prices in the market initially which is then matched by other firms.