Which of the Following Explains Why Two Firms, Apex and Bongo

question 87

Multiple Choice

Which of the following explains why two firms, Apex and Bongo, would engage in implicit collusion, rather than explicit collusion?

• A) Implicit collusion allows Apex to increase its profits at the expense of Bongo without Bongo knowing that collusion has occurred; if Apex engages in explicit collusion, Bongo will realize collusion has taken place and retaliate against Apex.
• B) Implicit collusion is less costly to both firms than explicit collusion; therefore, profits will be greater for both firms if they engage in implicit collusion.
• C) explicit collusion is illegal; if the managers of Apex and Bongo engage in implicit collusion they may be within the law.
• D) Implicit collusion always has an enforcement mechanism that forces both firms to collude; explicit collusion does not have an enforcement mechanism.

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Definitions:

Subject Line

The part of an email message that provides a summary or a hint of the content within, aimed at compelling the recipient to open the email.

Indirect Request

A form of communication where a request is made in a less direct or straightforward manner, often to be polite or to hint.

Computer Program

A set of instructions that directs a computer to perform specific tasks or operations.

Problem-solving Pattern

A systematic approach or method used to address and resolve issues or obstacles.