Question

A collusive agreement between two firms is likely to break down when​ ____________. A. it is easy to punish cheaters. B. firms value profits less today than in the future. C. the market has substantial long minus term value. D. detection of cheaters is difficult.

Answer 1

A collusive agreement between two firms is likely to break down when detection of cheaters is difficult .

Option D

Explanation:

Collusion is a secret agreement between two or more parties to suppress open competition by misleading, lying or defrauding others of their rightfulness or achieving a goal prohibited by law that usually is to defraud or gain an unacceptable market advantage.  

It is an agreement between companies or individuals that divides a market establishes prices, limits or limits production opportunities. It can include "strike, pay manipulation, kickbacks or the freedom of the relationship between the two parties." All collusion-driven actions are considered null and void legally.

In the USA, Canada collusion is illegal because of antitrust legislation, but implicit collusion even now takes place in the method of price management and tacit agreement.  

Example: Google and Apple announced that both firms decided not to hire people to work together to stop wage growth in 2015, a statement against bullying collusion by employees.