Tacit collusion is more likely when firms produce and sell similar products or services.

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Tacit collusion occurs when firms in an oligopoly market coordinate their actions indirectly without explicit communication. This is more likely to occur when firms produce and sell similar products or services because they have a heightened awareness of each other's actions and market conditions. This can lead to parallel behavior and tacitly agreeing to maintain prices or limit output.

Tacit Collusion Is More Likely When Firms Produce and Sell