When Firms Follow Each Other's Lead to Reduce the Level

question 63

Multiple Choice

When firms follow each other's lead to reduce the level of competition such as GE and Westinghouse did in steam turbines,it is referred to as

• A) explicit collusion.
• B) a strategic alliance.
• C) a mutual service consortium.
• D) conscious parallelism.
• E) partnering.

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Definitions:

Inside Information

Privileged, non-public information about a company that could provide a financial advantage in the stock market if used.

Corporate Employees

Individuals who are employed by corporations and contribute to its operations and success through their work.

Corporate Securities

Refers to financial instruments issued by corporations, such as stocks and bonds, representing an ownership stake or a debt obligation.

Ponzi Scheme

A fraudulent investing scam promising high rates of return with little risk to investors, which generates returns for older investors through revenue paid by new investors, rather than from legitimate business activities.