Best Paper and Copies R Us are two paper suppliers that are competing with each other. If Best Paper announces an upcoming price change next month, it may be signaling to Copies R Us its intent to engage in________ .

Question

Quizplus · Accepted Answer

Best Paper's announcement of a price change may indicate to Copies R Us that it intends to coordinate pricing decisions, which is a form of tacit collusion. This is a behavior commonly seen in oligopolistic markets, where a few large firms dominate the industry. While Chamberlin, Cournot, and Stackelberg oligopolies are also forms of market structures seen in oligopolistic markets, they do not necessarily require or involve collusion between firms.

Best Paper and Copies R Us Are Two Paper Suppliers