Economics Experiment
Important to note that there might arise some factors that influence the firm’s desire to cheat and the same are discussed below:
i)Prevailing Economic Conditions: It is said that the recession is the biggest enemy of collusion as at the times of poor economic condition, even firms operating under collusion are not able to generate sufficient sales and this leads to excess supply in the market. Hence, each firm, even if it is operating under the cartel, will try to avoid the profit reductions through price reductions and thus, they will gain sales at expense of their ...