Which One of the Following Statements Is NOT True

question 142

Multiple Choice

Which one of the following statements is NOT true?

• A) A firm that chooses to cheat on a price-fixing scheme should consider the short-term gain in profits from cheating versus the long-term loss in profits from being punished.
• B) The duopoly-pricing strategy leads to negative economic profits.
• C) Cartels may break down because of the incentive to cheat.
• D) Price leadership arrangements are an implicit price-fixing scheme.

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Definitions:

Consumer Education

Programs and efforts designed to inform individuals about their rights, responsibilities, and savvy practices when purchasing goods and services.

Legal Action

The process of pursuing a lawsuit or litigation to enforce or defend one's legal rights.

Ad Substantiation

An FTC standard requiring that advertisers have a reasonable basis for the claims made in their ads.

Reasonable Basis

A concept often used in law and regulations, referring to a well-founded rationale for decisions or actions.