If There Are Many Firms in an Industry,there Is Little

question 46

True/False

If there are many firms in an industry,there is little incentive for firms to engage in tacit collusion because a smaller proportion of the units of the product sold are affected by the price effect if a firm increases output.

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Definitions:

Present Value

The contemporary equivalence of a series of future cash inflows or a single future sum, adjusted by a given rate of return.

Perpetuity

A financial instrument that pays a fixed amount of interest indefinitely, with no maturity date.

Continuously Compounded

Refers to the mathematical limit where the frequency of compounding interest reaches infinity over a defined period, leading to the maximal possible growth.

Rate Of Return

The reward or penalty on an investment concluded over a chosen length of time, denoted as a percentage of the investment's initial outlay.