Tacit collusion in an industry is limited by:
A)a small number of firms.
B)simple products and pricing.
C)monopoly power.
D)a large number of firms and the bargaining power of buyers.

Question

Quizplus · Accepted Answer

Tacit collusion tends to be less effective in industries with a large number of firms and strong bargaining power of buyers because it is difficult for all firms to coordinate their behavior without being detected by customers. In industries with monopoly power or simple products and pricing, implicit understandings among a few firms can lead to effective collusion.

Tacit Collusion in an Industry Is Limited By