Any actions a firm takes that have the effect of reducing the level of rivalry in an industry that also do not require firms in an industry to directly communicate or negotiate with each other can be thought of as
A) tacit cooperation.
B) tacit collusion.
C) explicit collusion.
D) competitive parity.

Question

Quizplus · Accepted Answer

Tacit cooperation refers to actions taken by firms in an industry that reduce levels of rivalry, without requiring direct communication or negotiation between firms. This can include things like price leadership or matching, adoption of similar technologies or standards, and informal agreements on market segmentation. This type of behavior is widespread in many industries and is often not explicitly illegal, but it can still have anti-competitive effects. Tacit collusion, on the other hand, refers to a more explicit and coordinated effort among firms to reduce competition, often through price-fixing, market allocation, or other illegal practices. Explicit collusion involves more overt communication and negotiation among firms to coordinate prices, output levels, or market shares. Competitive parity simply refers to a state in which firms have equal capabilities and resources and are competing on a roughly level playing field.

Any Actions a Firm Takes That Have the Effect of Reducing