Which of the following is an example of tacit collusion?
A)OPEC
B)Copper cartel
C)Price leadership
D)Government franchise granted to a utility

Question

Quizplus · Accepted Answer

Price leadership is an example of tacit collusion as it occurs when a dominant firm in an industry sets a price and other firms follow suit. This behavior is not explicitly agreed upon among firms, but rather occurs through observation and the belief that following the dominant firm's pricing strategy is in their best interest. OPEC and the Copper cartel are examples of explicit collusion, as these organizations involve formal agreements among firms to control production and pricing. The government franchise granted to a utility is not an example of collusion, as it is a legal monopoly granted by the government in order to ensure the provision of essential services.

Which of the Following Is an Example of Tacit Collusion