Collusion Is the Active Cooperation of Firms Within an Industry

question 48

True/False

Collusion is the active cooperation of firms within an industry to reduce output and raise prices in order to get around the normal economic law of supply and demand.

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Definitions:

Interest Rate

The cost of borrowing money or the compensation for the service and risk of lending money, usually expressed as a percentage.

Plaster

A mixture of water, lime, or cement, and sand, used to coat walls and ceilings for a smooth or decorative finish.

Labor

Human effort used in the production of goods and services in the economy.

Positive Supply

A situation where the quantity of a good or service available increases as its price increases, indicating a direct relationship between price and quantity supplied.