A price umbrella, also known as the umbrella effect, is a pricing effect often created by a dominant company, in which competing firms can find buyers as long as they set their price at or below the level of the dominant one.[1][2] This may not apply if the competing firm's products are inferior.

Cartels can generate a price umbrella effect, enabling less efficient rivals to charge higher prices than they might otherwise be able to.[3][4]

References

  1. ↑ Ryan Jones (July 18, 2012). "The Reason for the iPad Mini". Retrieved 2012-08-15.
  2. ↑ Anthony Wing Kosner (2012-07-22). "Apple Will Sell A Smaller iPad Or Be Disrupted From The Bottom Up By Google's Nexus 7". Forbes. Retrieved 2012-08-15.
  3. ↑ William J. Kolasky (November 14, 2002). "Using Competition Policy to Promote International Competitiveness" (PDF). U.S. Depathement of Justice. Retrieved 2012-08-15.
  4. ↑ Philippe Choné1; Bruno Komly; Valérie Meunier (July 15, 2010). "Margin squeeze, entry, and "umbrella effect"" (PDF). CREST. Retrieved 2012-08-15.{{cite web}}: CS1 maint: numeric names: authors list (link)

See also


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