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Michael Munger on Antitrust

EconTalk

Setting a Competitive Price in Economics

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Every firm that sells stuff gets to rigt down somewhere on a sign or in a brosure or on line what its prices are. You can write down anything you want, but if you pick a number that's too high, no one will shop at your store. In wheat, all farmers get the same price for wheat. But that's a competitive market. If they raise their price, nobody will buy any gass. And if they cut their price, the other firms will match theman. Is that petition, or is it collusion? Hes, andas many, many people say, how it must be collusion? They chose the same price. It's probably competition. O.

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