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. 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.
References
- Ryan Jones (July 18, 2012). "The Reason for the iPad Mini". Retrieved 2012-08-15.
- 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.
- William J. Kolasky (November 14, 2002). "Using Competition Policy to Promote International Competitiveness" (PDF). U.S. Depathement of Justice. Retrieved 2012-08-15.
- Philippe Choné1; Bruno Komly; Valérie Meunier (July 15, 2010). "Margin squeeze, entry, and "umbrella effect"" (PDF). CREST. Retrieved 2012-08-15.
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See also
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