Question

________ occurs when price- and quantity-fixing agreements among producers are implicit. A) Tacit collusion B) A Cournot model C) A price-leadership model D) A monopoly

Answer 1

Answer:

The correct to answer to the following question is option A) Tacit collusion .

Explanation:

Tacit collusion ( which is also know as price leadership ) can be defined as the situation where a dominant firm in the market will set a price and other firms in the market would accept those changes in the price. Here the dominant firm usually sets high price, such that the firms who are least cost efficient would also be able to earn some return.