Surplus leader margin (SLM) is the margin the company with Power can earn while pricing is such that the margin of the weaker firm is zero. SLM is an indicator of the intensity of Power. The surplus indicated (if positive) gives S the opportunity for profits and/or Power position enforcement. In the cases of Network Economies and Scale Economies, the scale leader is S, so SLM indicates retaliatory latitude in protecting market share. In the case of CP, S is the challenger, and Power position enforcement involves diminishing the likelihood that W, the incumbent, will enter N to battle S. Such
...more
