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Tacit Collusion

Tacit collusion is unspoken actions between oligopolistic firms that are likely to minimise a competitive response. For example, two firms may decide to avoid price cutting or not attacking each other’s market share.

Tacit collusion is often difficult to detect and can be difficult to prove, as it does not involve explicit agreements or communication between firms. It is often used as a means of avoiding competition and maintaining higher profits, and it can lead to higher prices and reduced consumer welfare.

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