Which of the Following Is NOT a Reason Why Collusion

question 30

Multiple Choice

Which of the following is NOT a reason why collusion may be hard to sustain?

• A) Firms observe their rivals' prices only imperfectly.
• B) Marginal costs, and therefore agreed-upon prices, may differ among firms or products.
• C) Prices wars in practice may not conform to the predictions of the Bertrand model.
• D) The potential profits from collusion can be so high as to create an incentive not to undercut.

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Definitions:

Classical Conditioning

The practice of learning by frequently pairing two stimuli together; a response first provoked by the second stimulus is later provoked by the first stimulus without the second.

Conditioned Emotional Response

An emotional reaction acquired through classical conditioning, where a previously neutral stimulus is paired with an emotionally charged stimulus.

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with an unconditioned stimulus, elicits a conditioned response.

Little Albert

An early 20th-century experiment by John B. Watson and Rosalie Rayner, demonstrating classical conditioning in a young child.