Airline A and Airline B are the two largest airlines in the country.The chief executive officer of Airline A calls the chief executive officer of Airline B and says,"Why don't we both raise prices 25 percent across the board next week?" This is an example of
A) spirited competition.
B) attempted collusive behavior.
C) predatory pricing.
D) a corporate merger.
E) a tying arrangement.

Question

Quizplus · Accepted Answer

The suggestion by the CEO of Airline A to CEO of Airline B to raise prices 25% across the board next week shows an attempt at collusive behavior, which is essentially an agreement between competitors to limit competition and increase profits by coordinating and controlling prices.

Airline a and Airline B Are the Two Largest Airlines