Collusion is:
A) legal in the United States.
B) not possible when firms interact repeatedly forever.
C) more likely in industries with a large number of firms.
D) None of the preceding answers is correct.

Question

Quizplus · Accepted Answer

Collusion is illegal in most countries, including the United States. Collusion involves firms conspiring to fix prices, limit production, or divide markets in a way that harms competition. It is not possible for firms to collude forever as changing market conditions and the entry of new firms can disrupt the collusion. Collusion is more likely in industries with a small number of firms, known as oligopolies, rather than industries with a large number of firms. Therefore, none of the preceding answers is correct.

Collusion Is