Tacit Collusion

question 30

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 in the pricing of turbine engines.
• 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:

Liable

Legally responsible or obligated to someone or something, often used in the context of legal judgments or debts.

Disclosed Principal

A principal whose identity is known to a third party. The third party is aware that the agent is making an agreement on behalf of the principal.

Third Party

An individual or group besides the two primarily involved in a transaction or legal situation, often providing additional services or involvement.

Agent

A person or entity authorized to act on behalf of another person or entity, known as the principal, in business transactions or legal matters.