An Advantage of Unrelated Diversification Is That Competencies Can Be

question 55

True/False

An advantage of unrelated diversification is that competencies can be shared and leveraged throughout the value-chain activities.

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Definitions:

Cartel

An agreement between competing firms to control prices or exclude entry of a new competitor in a market, usually to increase market power and profits.

Formal Agreement

refers to a legally binding contract between parties that outlines specific obligations and rights.

Covert Collusion

A secret agreement between firms to fix prices, limit production, or engage in other practices to restrict competition illegally.

Kinked Demand Curve Model

An economic model suggesting that price competition among firms may be rigid because a firm raising its price does not lead to competitors following suit, while price decreases are matched. This results in a demand curve with a kink.