collusion

Question 1

what is collusion and example

Answer 1

• where two or more firms agree to limit competition
• where firms fix prices in order to avoid price wars

Question 2

why do firms collude

Answer 2

in order to avoid price wars and keep revenue high

Question 3

what are 2 types of collusion

Answer 3

• overt collusion
• tacit collusion

Question 4

what is overt collusion

Answer 4

a formal agreement between firms

Question 5

what is tacit collusion

Answer 5

an unspoken agreement between firms

Question 6

what are the benefits to whistle blowing for firms

Answer 6

• the firms gain immunity from the CMA whereas the other firms lose profit