3.4 - Collusion Flashcards
1
Q
What are the 2 primary types of collusion?
A
Overt
Tacit
2
Q
What is overt collusion?
A
Explicit co-operation + agreements
3
Q
What is tacit collusion?
A
Co-ordination without explicit communication + agreements
4
Q
What are the key aims of collusion in an oligopoly?
A
Maximise joint profits
Lowers costs of competition
Reduces uncertainty
5
Q
What are the costs of collusion?
A
Damages consumer welfare
Absence of competition
Reinforces cartel monopoly power
