Collusion is when firms work together to make decisions about price and quantity, which is often illegal due to antitrust laws. Option A refers to a boycott, which is different from collusion. Option B refers to perfect competition, where firms compete to reach zero economic profit, but it is not related to collusion. Option D is incorrect as one of the statements must be true.

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Collusion Is

Question 127

Multiple Choice

Collusion is:

A) buyers acting in unison against a company in efforts to change its practices.
B) the act of firms undercutting one another in competition until zero profits are earned.
C) the act of firms working together to make decisions about price and quantity.
D) None of these statements is true.

Correct Answer: