Which of the Following Quotes Shows Cheating on a Cartel

question 66

Multiple Choice

Which of the following quotes shows cheating on a cartel in the widget industry?

• A)"I am producing extra widgets,even though it costs me short-run profit,to stop Wally's Widgets from expanding into my market."
• B)"I am producing more widgets than Wally and I agreed to in our talk last week."
• C)"If only Wally and I could agree on a higher price,we could make more profit."
• D)"I have been spending extra on research and development of my new two-way widget."
• E)"Wally's Widgets should charge a higher price."

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Definitions:

PV Of CCA Tax Shield

The present value of capital cost allowance tax shield, which represents the discounted value of tax savings due to depreciation expenses.

PV Of After-Tax Lease Payments

The present value of after-tax lease payments is the current worth of all lease payments to be made over the lease term, adjusted for taxes.

Original Investment

The initial amount of money or capital put into an investment vehicle or project.

PV Of CCA Tax Shield

The present value of the tax savings a company realizes from being able to deduct the Capital Cost Allowance on its tax return.