When producers agree to restrict output, raise the price, and increase profits, the agreement is called ________.

Question

Quizplus · Accepted Answer

A collusive agreement is when producers agree to restrict output, raise the price, and increase profits. A pricing agreement is too generic and does not specify the intention to restrict output or raise prices. An oligopoly agreement refers to the situation where there are only a few large producers in the market, but this does not necessarily imply an agreement to restrict output and raise prices. A monopoly agreement refers to a situation where there is only one producer in the market, which is different from the collusive agreement among a group of producers.

When Producers Agree to Restrict Output, Raise the Price, and Increase