Suppose there are four large manufacturers of toilet paper tissue. The largest firm announces that it will raise its prices by 15 percent due to higher raw materials. Within three days, the other three large toilet paper manufacturers announce similar price hikes. Would this decision to raise prices constitute evidence of explicit collusion among the four companies? Briefly explain.

Suppose there are four large manufacturers of toilet paper tissue. The largest firm announces that it will raise its prices by 15 percent due to higher raw materials. Within three days, the other three large toilet paper manufacturers announce similar price hikes. Would this decision to raise prices constitute evidence of explicit collusion among the four companies? Briefly explain.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter15: Oligopoly And Strategic Behavior

Section: Chapter Questions

Problem 3P

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