The three main luxury hotels in a major tourist destination keep very close track of their competitors' room pricing, restaurant offerings, tour packages, and special services, such as airport transportation and spa privileges.When one hotel makes adjustments in prices or offerings, the other hotels follow suit.It is possible that these hotels are:
A) engaging in tacit collusion.
B) following uncertainty-reducing strategies.
C) monitoring business competitors for opportunistic behaviors.
D) following a competitive response strategy.

Question

Quizplus · Accepted Answer

The hotels are likely engaging in tacit collusion, as they are closely monitoring each other's actions and adjusting their own offerings in response, which is a form of unspoken coordination to maintain market stability and avoid price wars.

The Three Main Luxury Hotels in a Major Tourist Destination