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The ability of a group of firms to work together to reduce competition in their market or industry is called ________. Group of answer choices collusion differentiation collaboration fragmentation

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Answer:

The correct option is collusion

Step-by-step explanation:

Collusion is similar to creating a monopoly but the difference lies in the fact that under monopoly arrangement one firm takes the critical the decisions regarding output and price, but collusion involves a group of firms operating in the same sector forming an alliance to decide on quantity of output to produce as well as the price to charge.

A typical example of collusion is cartel of organization of petroleum exporting countries(OPEC), an alliance of some oil producing states where quota is handed to each member state as per the maximum production limit and overall the aim is to limit production in order to achieve a set target price of crude oil.

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