Collusion
A) may be explicit or tacit.
B) may be tacit and therefore legal.
C) is rarely practiced by competing firms.
D) cannot occur without direct communication among firms.
E) is a popular competitive strategy.

Question

Quizplus · Accepted Answer

Collusion can be either explicit, meaning firms directly communicate and coordinate their pricing and output strategies, or it can be tacit, where firms simply observe each other's actions and adjust their own actions accordingly. Tacit collusion is not necessarily illegal, although it can still be anti-competitive. Collusion is not a popular competitive strategy and is illegal in most countries.