A Force That Tends to Weaken Collusive Agreements Is Found

question 73

Multiple Choice

A force that tends to weaken collusive agreements is found when

• A) the colluding firms number two or three rather than 10 or 12.
• B) there are significant differences among the cost structures of the colluding firms.
• C) the firms produce virtually identical products.
• D) sales and profits in the industry are large and all the colluding firms experience high levels of capacity utilization.
• E) there is a lack of government enforcement of antitrust laws.

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Definitions:

Groupthink

A psychological phenomenon that occurs within a group of people when the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Consensual Positive Validation

The process through which individuals seek validation and approval for their beliefs or actions from others, typically within a social group that shares similar views.

Fear of Death

A common anxiety that involves dread or apprehension about the prospect of dying or the process of dying.

Charismatic Leader

A leader who inspires and motivates followers through their personal charm, persuasion, and powerful personality, rather than through formal authority or power.