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:

Reversing Entries

Journal entries made at the beginning of an accounting period to reverse or cancel out adjusting entries made at the end of the previous period.

Accrued Liabilities

Liabilities that have been incurred but not yet paid or recorded at the end of the accounting period.

Accrued Receivables

Amounts owed to a business for goods or services delivered but not yet paid by the end of an accounting period.

Income Summary Account

An account used in closing to collect revenues and expenses, the balance of which shows the net income or loss for the period.