The fact that the prices consumers pay for branded breakfast cereals are above the prices that would exist if there were true competition suggests that the cereal manufacturers are engaging in:
A) excessive cooperation.
B) joint ventures.
C) tacit collusion.
D) horizontal strategic alliances.

Question

Quizplus · Accepted Answer

Tacit collusion occurs when companies indirectly coordinate actions by signaling their intention to reduce output and maintain pricing above competitive levels, without explicit agreement.

The Fact That the Prices Consumers Pay for Branded Breakfast