Explicit Collusion Exists When Firms Directly Communicate with Each Other

question 67

True/False

Explicit collusion exists when firms directly communicate with each other to coordinate their levels of production or their prices and is legal in most countries.

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Definitions:

Imperfectly Competitive Market

A market structure in which participants have some control over the prices because not all conditions of perfect competition are met, such as monopolistic competition and oligopoly.

Perfectly Competitive Market

A market structure characterized by many buyers and sellers, where no single party can influence the market price.

Complementary Resource

A good or service that enhances the value or performance of another primary product or service.

Profit-maximizing Firm

A company that adjusts its production and sales strategies to achieve the highest possible profit, considering its costs and market demand.