Other Things Equal, Cartels and Similar Collusive Arrangements Are Easier

question 297

Multiple Choice

Other things equal, cartels and similar collusive arrangements are easier to establish and maintain

• A)when there are ample opportunities for the firms to make secret price concessions to selected buyers.
• B)during periods of business-cycle stability and full employment.
• C)when the demand and cost conditions of the participating firms differ substantially.
• D)when the number of firms is relatively large.

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Definitions:

Maintenance Margin

The minimum amount of equity that must be maintained in a margin account to avoid a margin call, expressed as a percentage of the current market value.

Rate of Return

The upward or downward movement in the value of an investment across a chosen timeframe, expressed as a percentage of the investment's initial investment.

Margin

Describes securities purchased with money borrowed from a broker. Current maximum allowed margin on stock purchases is 50%.

Sell the Stock

An action where an investor disposes of their ownership in a corporation through the sale of its shares.