Four propane delivery firms have a tacit agreement to charge a service fee of $50 in addition to $5 per gallon of propane. If the firms' cost of propane increases and one of the four firms advertises that it will increase the service fee to $75 next month, this is an example of________ .

Question

Quizplus · Accepted Answer

This is an example of a preannouncement, as one firm is announcing a future change in their fees. It is not a precommitment, as none of the firms are committing to a specific action or plan. It is not price leadership, as only one firm is making the announcement, not all four. It is not a meet-the-competition clause, as there is no mention of any competition or response to it.

Four Propane Delivery Firms Have a Tacit Agreement to Charge