Which of the following statements about collusion istrue?
A)Collusion is legal in the United States.
B)Its overriding goal is to enhance competition and thereby increase profits.
C)The greater the number of firms,the less difficult it is to maintain.
D)Collusion never results in benefits for the participants.
E)Collusion may help to increase the profits of the participating firms.

Question

Quizplus · Accepted Answer

Collusion occurs when two or more firms cooperate to reduce or eliminate competition in a market. The goal of collusion is typically to increase profits by allowing the participating firms to charge higher prices or reduce output. Therefore, option E is correct. Option A is incorrect since collusion is illegal in the United States. Option B is incorrect because the goal of collusion is to reduce competition and increase profits, not enhance competition. Option C is incorrect because the more firms there are, the more difficult it is to maintain collusion. Option D is incorrect because participating in collusion can result in benefits for the firms involved.

Which of the Following Statements About Collusion Istrue