Which of the following is TRUE regarding a collusive agreement? I. It is illegal in the United States.
II) Two or more producers agree to restrict output or raise prices.
III) Firms' profits are never maximized under this sort of agreement.
A) I and II
B) I and III
C) II and III
D) I, II and III

Question

Quizplus · Accepted Answer

Collusive agreements are illegal in the United States as they violate antitrust laws, and they involve producers agreeing to restrict output or raise prices to maximize profits. However, firms' profits can be maximized under such agreements, contrary to statement III.

Which of the Following Is TRUE Regarding a Collusive Agreement