A Price Rise Is Less Likely to Be Followed When

question 65

True/False

A price rise is less likely to be followed when a company is pursuing a harvest or hold objective because, in both cases, the emphasis is more on profit margin than sales/market share gain.

---

Definitions:

Covert Collusion

An indirect or secret agreement among competitors to engage in anti-competitive behaviors, such as price-setting, that is not openly acknowledged or visible to regulatory authorities or the public.

Herfindahl-Hirschman Index

A measure of market concentration used to determine the level of competition within industries.

Kinked Demand Curve

A perceived market demand curve that suggests prices will rapidly decrease if a firm raises its prices above those of its competitors, but will not increase significantly if the firm lowers prices.

Marginal Revenue

The additional income received from selling one more unit of a good or service, crucial for decision-making regarding output levels.