People Sometimes Point to Similar Gas Prices at Competing Gas

question 132

Multiple Choice

People sometimes point to similar gas prices at competing gas stations as evidence of collusion when they could just be selling at market price. If this is not good evidence of collusion, what is?

• A) The profits of the companies are unusually high in the short run.
• B) The station owners regularly have morning coffee together.
• C) There is some kind of punishment for cheating.
• D) Someone thinks they overheard their plans for collusion.

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Definitions:

Paid

Refers to the status of a financial obligation that has been fulfilled or settled.

Constant Annual Dividend

This refers to dividends that are paid out to shareholders at a constant rate each year, without fluctuation.

Market Price

The rate at which services or assets are being marketed currently.

Cumulative Voting

Cumulative voting is a voting system that allows shareholders to allocate their votes for the board of directors in a manner they prefer, often used to strengthen the voting power of minority shareholders.