Which statement is TRUE?
A)Once an industry has achieved tacit collusion,producers have an incentive to raise prices.
B)Tacit collusion is legal in the United States.
C)The fact that one firm changes its price shortly after another firm does is proof of tacit collusion.
D)It is difficult to determine how much tacit collusion exists in a particular industry;hence,tacit collusion remains hard to prosecute in the United States.

Question

Quizplus · Accepted Answer

It is difficult to determine how much tacit collusion exists in a particular industry, and therefore it remains hard to prosecute in the United States. Option A is incorrect because while producers have an incentive to raise prices after achieving tacit collusion, it is not necessarily true that it always happens. Option B is also incorrect because tacit collusion is generally viewed as a violation of antitrust laws in the US. Option C is incorrect because changing price after another firm does is not proof of tacit collusion; it could also be due to competitive pricing strategies.

Which Statement Is TRUE