Changes

Collusion in business is an agreement among members of a [[cartel]] in a particular industry not to compete in order to create artificial disincentives for new competitors.<ref>Or [[Barriers to entry]] into a market or industry.</ref>  

Collusion in business is an agreement among members of a [[cartel]] in a particular industry not to compete in order to create artificial disincentives for new competitors.<ref>Or [[Barriers to entry]] into a market or industry.</ref>  

Typically, collusion occurs when a group of large competitors, a cartel, divvy up [[market]] share among themselves to gain [[monopoly]] control,<ref>A cartel with monopoly control is sometimes referred to as an [[oligopoly]].</ref> and manipulate prices and profitability to make it impossible for a start-up competitor to gain market access. Thus, the public is denied the benefits of lower prices and improvements that come with time. It's also called "price rigging" or "unfair competition."<ref>Government sometimes has an incentive to favor Big Business and monopolistic trade practices because of the larger taxes revenues they create, and their ability to produce larger tax revenues faster in a new, unregulated industry. This tendency by the government to encourage unfair trade practices historically has been countered by populist movements.<br>This incentive only became bigger with passage of the Corporate Income Tax, a so-called "Progressive reform," that came after passage of the Sherman Anti-Trust Act.</ref>

Typically, business collusion occurs when a group of large competitors, a cartel, divvy up [[market]] share among themselves to gain [[monopoly]] control,<ref>A cartel with monopoly control is sometimes referred to as an [[oligopoly]].</ref> and manipulate prices and profitability to make it impossible for a start-up competitor to gain market access. Thus, the public is denied the benefits of lower prices and improvements that come with time. It's also called "price rigging" or "unfair competition."<ref>Government sometimes has an incentive to favor Big Business and monopolistic trade practices because of the larger taxes revenues they create, and their ability to produce larger tax revenues faster in a new, unregulated industry. This tendency by the government to encourage unfair trade practices historically has been countered by populist movements.<br>This incentive only became bigger with passage of the Corporate Income Tax, a so-called "Progressive reform," that came after passage of the Sherman Anti-Trust Act.</ref>

The [[OPEC]] cartel is an example of competitors in an industry colluding together to limit production and set prices. Each member agrees to a production quota which, cumulatively, sets the world price. If a member exceeds its production quota, it has the effect of driving down the world price and profitability of all members. If other members exceed their quota, a price war erupts from which some members may not survive.

The [[OPEC]] cartel is an example of competitors in an industry colluding together to limit production and set prices. Each member agrees to a production quota which, cumulatively, sets the world price. If a member exceeds its production quota, it has the effect of driving down the world price and profitability of all members. If other members exceed their quota, a price war erupts from which some members may not survive.