Two Firms Would Sometimes Be Better Off If They Got

question 62

Multiple Choice

Two firms would sometimes be better off if they got together and agreed to charge a high price, rather than to compete and risk having to charge a lower, competitive price.What is the greatest deterrent to this strategy?

• A)The firms may find that the price they charge is greater than the price that would maximise their profits.
• B)An agreement by firms to charge high prices is illegal.The government can fine the firms and send their managers to jail.
• C)Consumers may resent having to pay high prices and not buy from either of the firms.
• D)One of the firms may decide to lower its price and take business away from the firm that charged the high price.

---

Definitions:

Enslaved Men

refers to males who were forced into slavery, deprived of personal freedom and subjected to the will of their owners.

Irish Immigration

The movement of people from Ireland to other countries, notably to the United States in the 19th and early 20th centuries, driven by factors like the Great Famine.

Mid 18th Century

A historical period that spans from around 1750 to 1775, marking the middle of the 1700s.

Target Market

A specific group of customers at which a business aims its products and services.