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    What are the benefits arise out of firms colluding except for maybe more money available for research and devlopment?
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    They collude to raise profits. In order to gain market share, firms will battle against each other. For most markets, the best way to do this, and the quickest way, is to compete on price. Therefore a firm will reduce its price to try and steal market share from its competitor(s), in the hope of greater revenue/profits. However, by cutting the price, they also cut profit margins. Also, in response to this , the rest of the firms in the market will reduce their price. This means over time, all firms are cutting their profit margins, and are not gaining. Therefore, firms who see this will meet and agree a price, meaning that they keep equal market share, while also sustaining profit margins.

    **However, if you look at game theory it becomes very attractive to actually default on this agreement. In most countries, collusion is illegal therefore a firm would be stupid to sue a firm who goes ahead and lowers price anway, because it has also broke the law. This is seperate to your question but worth a look.

    If you need any more help pm me
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    You could say that by colluding, the extra profits made by the firm could be passed onto the consumer, through lower prices?
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    they make the bigger profits from charging higher prices to consumers.
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    If you mean to the economy/to consumers rather than those involved in the collusion, you could say about:
    - in industries where prices are likely to fluctuate a lot, it could create price stabilty allowing people to plan ahead.
    -more abnormal profits could mean more process innovation, so possibly lower unit costs and prices.
    - ... and product innovation, meaning more choice.
    - may be able to all have lower unit costs due to the collusion, e.g. if it's something with high transport costs they may each take a region of the country so they all reduce their transport costs, hence lower unit costs and lower prices.

    the analysis/evaluation for each depends on the industry etc ofcourse. (one big point I'd concentrate on is they may not actually pass these lower unit costs on/ may not use the abnormal profit to innovate...)
 
 
 
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