If firms meet together to decide on prices and outputs there is
Select one:
a. overt collusion.
b. tacit collusion.
c. price leadership.
d. None of the above are correct.
Answer
a. overt collusion.Explanation
This is mostly practiced by the competing firms (mostly oligopolistic firms) in an industry designed to control the market, act like a monopoly by also raising the market price. This strategy which has a distinguishing feature of overt collusion is a formal agreement. in this case, the practice is done just to benefit those involved and at times this though there are advantages and many cons associated with it, on the side of the market, it provides more serious drawbacks as well.
