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:

Profit

The financial gain realized when the revenues generated from business activities exceed the expenses and costs associated with operating the business.

Unrealised Profit

Profits that have been earned but not yet realized through a transaction, such as an increase in the value of an investment that has not been sold.

Partial Goodwill Method

A method of accounting for a business combination where goodwill is only recorded in relation to the parent's share of ownership in the subsidiary.

NCI

Non-controlling interest (NCI) refers to the portion of equity interest in a subsidiary not owned directly or indirectly by the parent company.