When Does Collusion Between Two Firms Occur

question 149

Multiple Choice

When does collusion between two firms occur?

• A)The firms independently pursue strategies that could hurt each other.
• B)The firms explicitly or implicitly agree to adopt a uniform business strategy.
• C)The firms announce that each will match its rival's market price.
• D)The firms act altruistically to bring about the economically efficient outcome.

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Definitions:

Delivery Speed

The rate at which a company can fulfill customer orders from the point of order placement to delivery, directly impacting customer satisfaction.

Holding Cost

The expenses associated with storing unsold goods or materials, including warehousing, insurance, and deterioration or obsolescence.

Shipping Cost

The expense incurred to transport goods from one place to another, typically paid by the seller or the buyer.

Factor Weighting Technique

A method used in decision-making that assigns different weights to various factors or criteria according to their importance or relevance.