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Reflect on 2 occasions where firms have engage in collusive and non-collusive behaviour.

Reflect on 2 occasions where firms have engage in collusive and non-collusive behaviour.
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Answer #1

Collusive and non-collusive behaviors are parts of oligopolistic competition.  

Collusive behavior leads to monopolist behavior of firms. Firms tend to charge monopoly price and produce output that is equal to monopoly ones. OPEC is supreme example of collusive market. Here, major oil exporting countries collude and set higher price by reducing quantity supplied.

Firms do not cooperative in non-collusive competition or behavior. here, firms compete for market share and prices come down. Coca Cola and Pepsi are examples of Non-collusive behavior.

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