Global Business 4th Edition By Mike Peng – Test Bank

Chapter 11 Managing Global Competitive Dynamics
TRUEFALSE
1. Competitive dynamics are the actions and responses undertaken by competing firms.
(A) True
(B) False
Answer : (A)
2. Tacit collusions typically lead to a cartel or trust.
(A) True
(B) False
Answer : (B)
3. Fitnit and Fittin’ are firms engaging in explicit collusion when they indirectly coordinate actions
by signaling their intention to reduce output and maintain pricing above competitive levels.
(A) True
(B) False
Answer : (B)
4. Cartels are often labeled as anticompetitive and outlawed by antitrust laws.
(A) True
(B) False
Answer : (A)
5. Cartel is an output- and price-fixing entity involving multiple competitors.
(A) True
(B) False
Answer : (A)
6. Prisoners’ dilemma is a type of game in which the outcome depends on two parties deciding
whether to cooperate or to defect.
(A) True
(B) False
Answer : (A)
7. Low barriers to entry into an industry make collusion between firms difficult.
(A) True
(B) False
Answer : (A)
8. An industry with heterogeneous products, in which rivals are forced to compete on price, is likely
to lead to collusion.
(A) True
(B) False
Answer : (B)
9. Collusion is more difficult between firms with high market commonality than firms with low
market commonality.
(A) True
(B) False
Answer : (B)
10. An industry without a price leader makes it easier for firms in that industry to form collusions.
(A) True
(B) False
Answer : (B)
11. Price leader is a firm that sets the highest price in the industry.
(A) True
(B) False
Answer : (B)
12. The price leader