Cheating in a Cartel Is More Likely to Occur If

question 269

Multiple Choice

Cheating in a cartel is more likely to occur if the industry

• A) has a large number of firms.
• B) has homogeneous products.
• C) has easily observable prices
• D) has little variation in prices.

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Definitions:

Antitrust Suit

Legal actions taken by governments against companies to prevent monopolistic practices and promote competition in the marketplace.

Horizontal Mergers

Horizontal mergers are business consolidations that occur between companies operating in the same industry, often resulting in a stronger competitive entity.

Conglomerates

Large corporations that consist of diverse companies or divisions operating in various industries or sectors, usually as a result of mergers or acquisitions.

Antitrust Enforcement

Government actions aimed at promoting competition among businesses by preventing monopolies, cartels, and other practices that restrict free trade.