When Firms in an Oligopoly Collude Without an Explicit Agreement

question 67

Multiple Choice

When firms in an oligopoly collude without an explicit agreement, economists say they are involved in:

• A) illegal collusion.
• B) tacit collusion.
• C) game theoretic collusion.
• D) predatory collusion.
• E) marginal collusion.

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Definitions:

Corrective Taxes

Taxes designed to influence market outcomes by correcting for the effects of externalities, encouraging or discouraging certain behaviors.

Regulations

Rules or directives made and maintained by an authority to regulate behavior, often in professional settings, industries, or governmental areas.

Optimal Level

The most efficient, effective, or desirable point or degree for a specific outcome.

Pollution

The contamination of natural environments by harmful substances or activities.