Final answer:
Explicit collusive behavior between direct competitors is illegal and involves actions like price-fixing and output restrictions. Other restrictive practices indirectly affecting competition include tie-in sales, bundling, and predatory pricing. Antitrust laws exist to combat these activities but can be challenging to enforce.
Step-by-step explanation:
Explicit collusive behavior between direct competitors is an illegal business practice. Collusion occurs when firms in an oligopoly work together to control market prices and output as if they were a single monopoly. This kind of coordination among businesses is designed to reduce competition by setting higher prices and restricting the quantities produced.
There are various restrictive practices that do not involve outright collusion but still negatively impact competition, such as tie-in sales, bundling, and predatory pricing. While these practices do not always directly imply an agreement among firms, they can create barriers to entry and deter potential competition within the market. Predatory pricing, for example, involves lowering prices to a level that other firms cannot compete with, which can intimidate potential competitors and is a violation of U.S. antitrust laws.
Antitrust authorities strive to prevent collusion and other anti-competitive practices to maintain a healthy market environment. While it can sometimes be challenging to prove these violations, there is a continuous effort to enforce regulations that uphold fair competition, benefiting both consumers and the market as a whole.