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The New Palgrave Dictionary of Economics pp 7860–7862Cite as

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Limit Pricing

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Abstract

The central idea of limit pricing is that an incumbent monopolist or collusive group will or can forestall entry by charging some price below that which maximizes static own profit. But a strategic price response is only one possible incumbent response to entry. A full understanding of the determinants of equilibrium market structure in inherently oligopolistic industries must take the full range of possible responses into account.

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Authors and Affiliations

  1. http://link.springer.com/referencework/10.1057/978-1-349-95121-5

    Stephen Martin

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  1. Stephen Martin
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© 2018 Macmillan Publishers Ltd.

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Martin, S. (2018). Limit Pricing. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_1181

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