All of the following are true regarding tacit collusion except which one?

Question

Quizplus · Accepted Answer

Tacit collusion is more likely when the price elasticity of demand is low, not large. In a market with low elasticity, firms are less likely to compete aggressively on price, leading to higher prices and reduced competition. Tacit collusion is an informal, unstated agreement between competing firms to reduce competition and increase profits, without directly communicating with each other. This harms buyers by reducing choices and increasing prices. High barriers to entry can also make tacit collusion more likely, as new firms are unable to enter the market and compete with existing firms.

All of the Following Are True Regarding Tacit Collusion Except