What is collusion in economics?
A. Legal cooperation between firms
B. Illegal agreement to fix prices
C. Selling at low prices
D. Importing cheap products
Answer (2)
The correct answer is letter B. Illegal agreement to fix pricesCollusion is when businesses secretly agree to set prices or control the market, which reduces competition and harms consumers. This is illegal in most countries, including the Philippines, because it creates unfair pricing.
The correct answer is B. Illegal agreement to fix prices.In economics, collusion refers to a secret and illegal agreement between competing firms to control prices, limit production, divide markets, or otherwise restrict competition. This behavior harms consumers because it usually leads to higher prices and less choice, violating fair market principles.
