Question

Can Apple and Samsung Collude to increase their profits? Why or why not?

Answer 1

Collusion is a strategy via profits can be maximized. The reason is that in collusion firms can set high price for the product and earn profit by creating a monopoly.

In case of Apple and Samsung both are competitive. There is competition between both. Both try to increase their market. If both collude with each other then can increase their profits. But if not collude then can charge normal price because if try to charge high price then due to competition and to grab market, one have to decrease the price. Therefore, collusion is better.