ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Price fixing, bid rigging, and other forms of collusion are illegal and are subject to criminal prosecution by the Antitrust Division of the United States Department of Justice.

Detailed explanation-2: -Collusion is illegal in the United States, Canada and most of the EU due to antitrust laws, but implicit collusion in the form of price leadership and tacit understandings still takes place.

Detailed explanation-3: -Collusion is primarily an illegal secretive agreement or cooperation between two parties intending to disrupt market stability. Generally, individuals or companies who normally compete against each other decide to work together and influence the market to achieve competitive market advantage.

Detailed explanation-4: -An example of illegal collusion is a secret agreement between firms to fix prices. Such agreements may be reached in a completely informal fashion. Indeed, enforcing competitive practices may not even require evidence that the firms have had any sort of contact at all.

Detailed explanation-5: -Cases of collusion are frequently illegal, since they are governed by antitrust laws. The outcome of collusion is that the consumer ends up paying higher prices than would have been the case if there had been a heightened level of competition.