Question

Suppose that in the market for cell phone service the number of competitors has dwindled until Man-Q Networks and Bat-Mobile have become the only providers left in the nation. Seeking to boost their profits, the two companies secretly agree to a coordinated increase in their prices for cell phone minutes. This practice is known as predatory pricing. antitrust. a Nash equilibrium. collusion. tying.

Answer 1

Answer:

The correct answer is the option D: collusion.

Explanation:

To begin with, a collusion is a type of agreement known in the business world for having the characteristic of being an agreement between two parties with the purpose of limiting the open competition and fair play by defrauding certain legal rights or also gaining an unfair market advantage. Moreover, the most commons practices in this type of unfair agreement are for example: the setting of prices; the limitiation of production; or to divide the market as well too. Finally, it is understandable that if two firms are alone in the market and try to increase their prices mutually in order to obtain more benefits each one, then they are doing a collusion.