Hotels R Us and Hotel Supply are two hotel toiletry suppliers that are competing with each other. If Hotels R Us announces an upcoming price change next month, it may be signaling to Hotel Supply its intent to engage in _________ .

Question

Quizplus · Accepted Answer

Hotels R Us announcing an upcoming price change could be interpreted as a signal to Hotel Supply that it intends to raise prices, which could suggest an attempt at tacit collusion. Tacit collusion occurs when firms coordinate their behavior without explicitly communicating or entering into a formal agreement.

Hotels R Us and Hotel Supply Are Two Hotel Toiletry