Which of the following is NOT a reason why collusion may be hard to sustain?
A) Firms observe their rivals' prices only imperfectly.
B) Marginal costs, and therefore agreed-upon prices, may differ among firms or products.
C) Prices wars in practice may not conform to the predictions of the Bertrand model.
D) The potential profits from collusion can be so high as to create an incentive not to undercut.
Correct Answer:
Verified
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