Tacit Collusion

question 9

Multiple Choice

Tacit collusion

• A) involves direct communication among competing firms.
• B) is most likely to be successful if there are many competitors.
• C) is seen with conscious parallelism as practiced by GE and Westinghouse.
• D) is not illegal.
• E) is most effective when the industry does not have a firm that acts as a price leader.

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Definitions:

Voting Stock

Shares in a company that grant the holder the right to vote on company matters, such as electing the board of directors.

Contingent Payment

A payment that is due only upon the occurrence of certain events specified in a contractual agreement.

Cash Flows

The overall volume of cash inflows and outflows within a business, significantly affecting its financial fluidity.

Probability-Weighted

An approach to decision-making or forecasting that involves taking into account the likelihood of various outcomes, each weighted by its probability.