Collusion occurs when firms ________.

Question

Quizplus · Accepted Answer

Collusion refers to an agreement between firms to limit competition by coordinating their production or pricing decisions. This is commonly seen in situations where firms in an industry have limited competition and can collectively raise prices or restrict output levels to maximize profits. Therefore, the correct answer is B - collusion occurs when firms conspire to set the quantity they produce or the prices they charge.

Collusion Occurs When Firms ________