In economic terms, what does "collusion" typically involve?

• A. Independent pricing strategies
• B. Agreements among competitors for mutual benefit
• C. Regular compliance with market regulations
• D. Consumer advocacy for fair competition

Answer: (B)

Collusion typically refers to a situation where competitors in a market come together to make agreements that benefit them collectively, often at the expense of market competition and consumers. This could involve setting prices, limiting production, or dividing markets among themselves, which can lead to higher prices, reduced choices for consumers, and overall market manipulation. When companies collude, they act not as independent entities in a competitive environment but rather as a unified entity to achieve greater profit margins or control over a particular market segment. This behavior undermines the principles of a free enterprise system, which is built on competition and fair practices.

The other options do not align with the concept of collusion: independent pricing strategies suggest competitors are not collaborating, regular compliance with market regulations usually implies lawful operation without conspiratorial actions, and consumer advocacy concerns itself with promoting fair competition rather than engaging in collusion.