Question

Suppose there are three firms in the widget industry. Widgets 'R' Us decides not to raise the price for its widgets, for fear that The Widget Warehouse and Widgets Unlimited, Ltd. will maintain their prices and take away some of Widget's 'R' Us's market share.

Suppose there are three firms in the widget industry. Widgets R Us decides not to raise the price for its widgets, for fear that The Widget Warehouse and Widgets Unlimited, Ltd. will maintain their prices and take away some of Widgets R Uss market share. This decision on the part of Widgets R Us is an example of O collusion mutual interdependence. O price fixing. O allocative efficiency

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