If the several companies in the tobacco industry produce similar products but have very different marginal costs: they are more likely to engage in tacit collusion than firms with similar costs. output of tobacco products is more likely to be near the monopoly level than in an industry whose firms have similar costs. prices for tobacco products are more likely to be near the monopoly level than in an industry whose firms have similar costs. they are less likely to engage in tacit collusion than firms with similar costs.

Question

Elle Munoz

Business

17 February, 09:07

If the several companies in the tobacco industry produce similar products but have very different marginal costs: they are more likely to engage in tacit collusion than firms with similar costs. output of tobacco products is more likely to be near the monopoly level than in an industry whose firms have similar costs. prices for tobacco products are more likely to be near the monopoly level than in an industry whose firms have similar costs. they are less likely to engage in tacit collusion than firms with similar costs.

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Chaim · Answer 1

If the several companies in the tobacco industry produce similar products but have very different marginal costs: they are more likely to engage in tacit collusion than firms with similar costs.

Explanation:

Tacit collusion occurs when firms silently agree on a strategy that will benefit them both either by cutting cost or increasing patronage.

If the several companies in the tobacco industry produce similar products but have very different marginal costs, some firms might decide to collude tacitly by lowering their prices therefore controlling a larger potion of the addressable market.

The reason this action is taken silently is because express collusion will attract legal sanctions that will be supported by firms within the industry that did not collude.