Multipoint competition exists when two or more diversified firms simultaneously compete in multiple markets, and multipoint competition can serve to facilitate a particular type of tacit collusion called mutual forbearance.

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Multipoint competition can lead to mutual forbearance, which is a type of tacit collusion where firms refrain from aggressive competition in certain markets to avoid retaliation in other markets where they compete against each other. This can help stabilize prices and reduce competitive pressures.

Multipoint Competition Exists When Two or More Diversified Firms Simultaneously