In the context of a posted offer market, tacit collusion refers to a situation:
A) sellers can talk to one another about what prices they wish to charge.
B) a high-cost seller posts a high price and other low-cost sellers follow suit by positing that same high price.
C) buyer can talk to one another about demand withholding.
D) bids that are lower than the current high lowest bid and asks that are higher than the current highest ask are placed in a rank queue behind standing bid and ask respectively.

Question

Quizplus · Accepted Answer

Tacit collusion in a posted offer market occurs when sellers implicitly coordinate their pricing strategies without direct communication, often leading to higher prices. Choice B describes a scenario where a high-cost seller sets a high price and low-cost sellers follow by posting the same high price, effectively coordinating prices without direct communication, which is a form of tacit collusion.

In the Context of a Posted Offer Market, Tacit Collusion