ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -One of the most common ways of colluding is price fixing. Price fixing occurs when there are a small number of companies, commonly referred to as an oligopoly, in a particular supply marketplace. This limited number of businesses offer the same product and form an agreement to set the price level.

Detailed explanation-2: -If oligopolists compete hard, they may end up acting very much like perfect competitors, driving down costs and leading to zero profits for all. If oligopolists collude with each other, they may effectively act like a monopoly and succeed in pushing up prices and earning consistently high levels of profit.

Detailed explanation-3: -Answer and Explanation: The market structure where collusion can happen is an oligopoly market structure. In the oligopoly market, the products are slightly differentiated products or very close substitute products.

Detailed explanation-4: -Oligopoly markets are markets dominated by a small number of suppliers. They can be found in all countries and across a broad range of sectors. Some oligopoly markets are competitive, while others are significantly less so, or can at least appear that way.