When Members of an Oligopolistic Industry Agree to Collude, Raising

question 219

Multiple Choice

When members of an oligopolistic industry agree to collude, raising their product price substantially above average cost, the passage of time (months and years)

• A) is usually needed for the members to solidify their cooperation.
• B) usually results in finer control of prices and markets by the group and larger profit margins.
• C) is likely to erode the agreement, as ways to cheat are developed by some participants and new entry is encouraged by the high price.
• D) seldom has any impact on the agreement, as long as the participants maintain high profit levels as a result of the agreement.

Understand the importance and mechanisms of strategic changes within organizations.

Identify the influence of management programs and leadership behaviors on organizational efficiency and service quality.

Recognize the role of human and social capital in the success of an organization.

Understand the components and significance of competitive strategy.

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Definitions:

Specific Number

A specific number refers to a distinct and particular numerical value, identified without ambiguity.

Randomly Varying

Exhibiting changes that lack a specific pattern, direction, or expectation, occurring in a manner that cannot be predicted.

Reinforcement

In behavioral psychology, a consequence that will strengthen an organism's future behavior whenever that behavior is preceded by a specific antecedent stimulus.

Variable Interval

A variable interval refers to a schedule of reinforcement where a response is rewarded after an unpredictable amount of time has passed, used in behaviorist studies.