- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 1. The Firm and Market Structures
- Subject 8. Oligopoly
CFA Practice Question
Collusion is motivated by a desire to ______.
B. increase profits by eliminating competition
C. better meet the needs of consumers through cooperation
D. avoid competition and increase profits
A. reduce costs by eliminating unnecessary competition
B. increase profits by eliminating competition
C. better meet the needs of consumers through cooperation
D. avoid competition and increase profits
Correct Answer: D
Collusion is motivated by the desire to avoid competition and increase profits.
User Contributed Comments 6
| User | Comment |
|---|---|
| cgeek | B? |
| Claudio | You cannot eliminate competition. just wording difference I think. |
| Done | You can eliminate competition but then it's desire turns into price fixing which is illegal. |
| wulin | Eliminating competition = Kicking firms out of market. Avoiding competition = Everybody in without competition. |
| YOUCANDOIT | nice explanation wulin! |
| walterli | Russian Collusion |