Question

Price fixing

Answer 1

Answer- Price fixing is a process where the firms who are rivals or competitors fix a price below which they will not sell the product or service. They enter into an agreement which is considered unlawful or in economics terms illicit. Generally firms influence the demand and supply and hence change the market conditions. The main reason behind this is to make huge profits as the product or service will then be sold at a much higher price. An example of price fixing could be where tge manufacturers and retails come together and form an illicit agreement where they decide to sell the products or service at a price which shall not less than the price decided and occoesingly set the discount rates.

As per the theory of neoclassical sich price fixing is not considered to be efficient and thus is an agreement which is anti competent.