Use the following scenario to answer the following questions:
Kit-N-Sit and Kittysitters are two cat-sitting services in Kent,Ohio.There are no other cat-sitting services,so the market is considered to be a duopoly.
-When firms in an oligopoly collude without an explicit agreement,economists say they are involved in ________ collusion.
A) illegal
B) tacit
C) game theoretic
D) predatory
E) marginal

Question

Quizplus · Accepted Answer

Tacit collusion refers to when firms in an oligopoly coordinate their behavior without an explicit agreement. In this scenario, Kit-N-Sit and Kittysitters are the only cat-sitting services in the market, so if they coordinate their prices and other business practices, they would be engaging in tacit collusion.

Use the Following Scenario to Answer the Following Questions