The active cooperation of firms within an industry to reduce output and raise prices to get around the normal law of supply and demand is referred to as
A) a strategic alliance.
B) collusion.
C) a strategic roll up.
D) a merger.
E) licensing.

Question

Quizplus · Accepted Answer

Collusion refers to the active cooperation between firms in an industry to reduce output and raise prices to manipulate the market. This is an illegal practice as it goes against the principles of fair competition and harms consumers. Strategic alliances, strategic roll-ups, mergers, and licensing may involve cooperation between firms, but they do not necessarily aim to manipulate prices and reduce output like collusion does.

The Active Cooperation of Firms Within an Industry to Reduce