When Rival Firms Agree to Control Output and Raise Prices

question 241

Multiple Choice

When rival firms agree to control output and raise prices, there is:

• A) a horizontal merger
• B) a cartel
• C) a tying arrangement
• D) an interlocking directorate
• E) a vertical merger

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Definitions:

Rational Choice Theory

An economic principle that states individuals always make prudent and logical decisions that provide them with the highest amount of personal utility.

Macro Level

Analysis or perspectives focused on large-scale structures and processes in society, often contrasting with micro-level individual or small group interactions.

Maximize Interests

The process of optimally increasing the benefits or gains from a situation or decision.

Maintain Associations

The ongoing effort to keep relationships or connections between entities or concepts active and beneficial.