Asked by Anushruti Singh on May 11, 2024
Verified
Firms are more likely to collude when the economy is in a recession.
Collude
An agreement between firms in the same industry to limit competition among them by setting prices or output levels.
- Determine the features and impacts of collusive versus non-collusive oligopolies.
- Examine the influence of market dominance and competitive forces on the formulation of pricing and profit strategies.
Verified Answer
AZ
Angelica ZhengMay 13, 2024
Final Answer :
False
Explanation :
During a recession, firms are more focused on survival rather than collusion, as demand is lower and each firm is trying to maintain its own market share and profitability. Collusion is more likely in stable or growing economic conditions where firms seek to maximize profits through coordinated actions.
Learning Objectives
- Determine the features and impacts of collusive versus non-collusive oligopolies.
- Examine the influence of market dominance and competitive forces on the formulation of pricing and profit strategies.