Question 1
________ occurs when price- and quantity-fixing agreements among producers are implicit.
◦ Tacit collusion
◦ A Cournot model
◦ A price-leadership model
◦ A monopoly
Question 2
Tacit collusion
◦ is legal under the U.S. antitrust laws.
◦ occurs when firms engage in formal agreements to reduce output and increase prices in their industry.
◦ is more likely to be successful in increasing industry profits when there are a few, similar firms in the industry.
◦ is more likely to effectively raise prices in the industry when demand is elastic.
