Question

What is the difference between explicit collusion and implicit​ collusion? Unlike explicit​ collusion, implicit collusion:
A. is where firms meet and agree to charge the same price without employing retaliation strategies.
B. is illegal.
C. is where firms meet and agree to not compete without appointing a price leader.
D. is where firms signal to each other without actually meeting and agreeing to charge the same price.
E. is where firms meet to discuss not competing without actually reaching an agreement.

Answer 1

Explicit​ collusion, implicit collusion is where firms signal to each other without actually meeting and agreeing to charge the same price.

Answer: Option D

Explanation:

Implicit type of collusion is the collusion where all the firms in the market who are dealing in a particular good, decide to charge the same price of the good in the market.

For this purpose, they do not meet each other. They just signal each other to charge the same price of the good in the market to the consumers of the good. This form of collusion is different from the explicit form of collusion.