Term
What is a Collusion?
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Definition
An agreement by firms to fix prices, share the market, or engage in other non-competitive activity.
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Term
What are the purposes of Collusion?
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Definition
Reduce Uncertainty About Potential Entrants
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To Increase Profits
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Prohibit Entry
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Term
What is a way of reducing uncertainty about potential entrants, to increase profits, and to prohibit entry into a firm?
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Definition
To form a Collusion
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Term
What is a Cartel?
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Definition
A formal alliance of firms that reduces output and increases price in an industry in an effort to increase profits.
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Term
What is a Collection of Firms participating in a Collusion?
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Definition
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Term
Is it illegal to prohibit entry into a firm?
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Definition
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Term
Are Cartels illegal in the US?
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Definition
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Term
What type of laws prohibit Cartels in the US?
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Definition
Anti-Trust Laws
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Term
What are Anti-Trust Laws?
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Definition
Laws that prohibit illegal behavior by firms, especially non-competitive behavior.
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Term
What is the primary government policing organization, that enforces Anti-Trust Laws?
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Definition
The Federal Trade Commission (FTC)
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Term
What is charged to a firm that breaks Anti-Trust Laws and is busted by the FTC?
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Definition
Treble Damages
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Term
What are examples of cartels?
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Definition
Global Coffee Cartel
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OPEC petroleum cartel
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Livestock Feed Cartel (Busted in 1996)
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School Milk Cartel (Busted in 1993)
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Electrical Equipment Cartel (Busted in 1960)
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Term
What are elements of oligopoly arrangements?
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Definition
Cooperation
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Unstable Equilibrium
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Threats
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Rigidities
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