Gamma Food Products competes in the "center-of-the-aisle" packaged foods business. Ever since its founding and membership in the industry, the company has focused on gaining market share. In 2017, it had, by far, the largest market share in the industry and used this advantage to create order and discipline in the industry, particularly in terms of prices. Starting in late 2016, Gamma Food Products' VP of Marketing, Polly Kundig noticed the heads of Gamma's four largest competitors were meeting often surreptitiously, particularly at trade shows. Parallelly, Kundig also noticed that the four firms were pricing their products at around the same level and distinct from the prices of others, including Gamma. In addition, when one of the four made a move in pricing or capacity planning, the others made quick responses.
-The frequent surreptitious meetings of Gamma Food Products' four largest competitors,observed by Polly Kundig,suggests that they are engaged in ________.

Question

Gamma Food Products competes in the "center-of-the-aisle" packaged foods business. Ever since its founding and membership in the industry, the company has focused on gaining market share. In 2017, it had, by far, the largest market share in the industry and used this advantage to create order and discipline in the industry, particularly in terms of prices. Starting in late 2016, Gamma Food Products' VP of Marketing, Polly Kundig noticed the heads of Gamma's four largest competitors were meeting often surreptitiously, particularly at trade shows. Parallelly, Kundig also noticed that the four firms were pricing their products at around the same level and distinct from the prices of others, including Gamma. In addition, when one of the four made a move in pricing or capacity planning, the others made quick responses. 
-The frequent surreptitious meetings of Gamma Food Products' four largest competitors,observed by Polly Kundig,suggests that they are engaged in ________.

Quizplus · Accepted Answer

The fact that the competitors are meeting secretly and responding to each other's moves in pricing and capacity planning suggests that they are engaged in explicit collusion, which is illegal under antitrust laws. Such collusion could include price-fixing, market allocation, or other anti-competitive practices.

Gamma Food Products Competes in the "Center-Of-The-Aisle" Packaged Foods Business