Which of the following explains why two firms, Apex and Bongo, would engage in implicit collusion, rather than explicit collusion?
A) Implicit collusion allows Apex to increase its profits at the expense of Bongo without Bongo knowing that collusion has occurred; if Apex engages in explicit collusion, Bongo will realize collusion has taken place and retaliate against Apex.
B) Implicit collusion is less costly to both firms than explicit collusion; therefore, profits will be greater for both firms if they engage in implicit collusion.
C) explicit collusion is illegal; if the managers of Apex and Bongo engage in implicit collusion they may be within the law.
D) Implicit collusion always has an enforcement mechanism that forces both firms to collude; explicit collusion does not have an enforcement mechanism.
Answer: C
You might also like to view...
In 2014, the price of peanuts was rising, which lead peanut butter sellers to expect the price of peanut butter would rise in the future
Consequently, in the current market for peanut butter there was ________ which resulted in ________ in the price of peanut butter and ________ in the quantity of peanut butter. A) an increase in demand for peanut butter; an increase; an increase B) an increase in supply of peanut butter; a decrease; an increase C) a decrease in demand for peanut butter; a decrease; a decrease D) a decrease in supply of peanut butter; an increase; a decrease
During the winter of 1997-1998, the northeastern United States experienced warmer than usual conditions. The price of home heating oil was less than it was during the previous winter, but people bought less home heating oil
This contradicts the Law of Demand. Indicate whether the statement is true or false
What type of risk behavior does the person exhibit who is willing to pay $5 for the chance to bet $60 on a game where 20% of the time the bet returns $100, and 80% of the time returns $50? Explain
What will be an ideal response?
Suppose that the equilibrium price of T-shirts increases and the equilibrium quantity of T-shirts decreases. This is best explained by:
A. an increase in the demand for T-shirts. B. an increase in the supply of T-shirts. C. a decrease in the demand for T-shirts. D. a decrease in the supply of T-shirts.