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Economic Definition of fringe firms. Defined.

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Term fringe firms Definition: A term employed in industrial organization to describe a group of small price taking firms that follow a dominant firm in a market. That is, fringe firms in a market follow the price leadership of the dominant firm. The dominant price sets a price and small fringe firms take it as given. Each firm has usually a small market share although all fringe firms together can have a substantial market share.

 

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