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18 April, 14:51

What is collusion among oligopolies, and how does it tend to reduce competition and harm consumers by imposing higher prices

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  1. 18 April, 14:54
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    Collusion consists of a small group of businesses/corporations working together in order to manipulate prices of a product or good within a society. This negatively effects society, as it reduces competition.

    Here's an example. Let's say there are only 4 businesses that sell cars. These 4 businesses could work together to make sure they charge consumers a very high price for their cars. This is collusion. This hurts the customer because there are so few places where a car can be bought. The consumer has no choice but to go to one of these four businesses in order to buy a car.
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