Which of the following best describes mutual forbearance?
A) It is a situation where a firm faces the same rival in more than one market.
B) It is a situation where rivals launch lower-end brands to protect devaluation of their established brands.
C) It is a situation where competing firms form a cooperative arrangement to ward off third-party competition.
D) It is a situation where rivals do not act aggressively because each recognizes that the other can retaliate in multiple markets.
E) It is a situation where rivals form a strategic alliance without forming a new entity to deal with third-party competition.

Question

Quizplus · Accepted Answer

Mutual forbearance occurs when firms recognize that aggressive actions in one market could lead to retaliation in another, leading to a tacit understanding to avoid aggressive competition.

Which of the Following Best Describes Mutual Forbearance