According to Barney, under which condition would tacit collusion most likely be successful?
A) There is a large number of identifiable competitors.
B) Costs are not similar among firms.
C) One firm tends to act as the price leader.
D) Sales are characterized by a high frequency of large orders.
E) There are low barriers to entry in the industry.

Question

Quizplus · Accepted Answer

Tacit collusion is more likely to be successful when one firm acts as the price leader and the other firms follow its lead. This reduces the uncertainty and complexity of the pricing decisions for the firms involved, making it easier to coordinate on higher prices. Option A, B, D, and E are not conditions that necessarily facilitate tacit collusion.

According to Barney, Under Which Condition Would Tacit Collusion Most