Principles of Microeconomics / Unit 10 MIC 0906 short lesson, about 20 seconds
Collusion and Restrictive Practices
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The idea
Collusion, fixing prices, limiting output, rigging bids or dividing territories, is illegal. Restrictive practices reduce competition without an explicit agreement and are judged case by case: exclusive dealing, tying, bundling, predatory pricing.
In practice
Selling one product only with another is tying.
Where people slip
Bundling at a discount with separate purchase available is usually lawful; predatory pricing is tested by price below average variable cost.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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