question archive State true or false and justify your answer: In an oligopoly, the firm that has the largest market share will also be the price leader

State true or false and justify your answer: In an oligopoly, the firm that has the largest market share will also be the price leader

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State true or false and justify your answer:

In an oligopoly, the firm that has the largest market share will also be the price leader.

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Answer: True

In most cases, the largest producer will be the market leader will be the price leader because they have the most market power. This means they can affect prices far better than other members of the oligopoly and thus game theory would suggest they have the greatest ability to hurt the payoffs of the other members.