Chapter 66, Problem 2MCQ

To determine

To state: the term used for, when the firms do not have a formal agreement on pricing, but they increase their profits by adopting the prices of a price leader.

Answer to Problem 2MCQ

Correct option is B i.e., non-price competition.

Explanation of Solution

The term used for when the firms do not have a formal agreement on pricing, but increase their profits by adopting the prices of a price leader is non-price competition.

Non-price competition is defined as a marketing strategy "where one firm attempts to differentiate its product or service from rival products based on traits like workmanship and design and not on price.