Tacit collusion is more likely to be successful if there ________ firms in an industry.
A)are a large number of
B)is a small number of
C)are unequally sized
D)are successful

Question

Quizplus · Accepted Answer

Tacit collusion is easier to maintain when there are fewer firms in an industry as there is a greater ability to monitor and react to each other's behavior. With a small number of firms, the tacitly agreed-upon rules of the game are more easily communicated and enforced, increasing the likelihood of successful collusion.

Tacit Collusion Is More Likely to Be Successful If There