Collusion in Party Planning Industry: Impeding and Aiding Factors
Nola and Charles' Collusion Efforts in Trident, IA
Nola and Charles both own party planning firms in the small town of Trident, IA. As they are the only party planners in town, they want to collude to make the price of party planning high.
Classify the Scenarios
a. A party planning school opens and the new graduates are ready to plan. This will ______ Nola's and Charles' efforts to collude.
b. Charles and Nola both charge a fixed price per person for a party. This will ______ Nola's and Charles' efforts to collude.
c. Charles develops a signature appetizer that becomes the must-have appetizer in Trident. This will ______ Nola's and Charles' efforts to collude.
d. Nola lowers her price on national television. This will ______ Nola's and Charles' efforts to collude.
Answers
a. Impede: Party planning school and new graduates availability hinder collusion efforts.
b. Aid: Fixed price per person aids collusion efforts.
c. Impede: Charles' popular signature appetizer hampers collusion efforts.
d. Aid: Nola's televised price reduction supports collusion efforts.
The opening of a party planning school and the availability of new graduates will impede Nola and Charles' efforts to collude as increased competition will lead to more options for customers, making it difficult for them to maintain high prices.
Charging a fixed price per person for a party will aid Nola and Charles' efforts to collude as it establishes a pricing standard that limits competition and reduces the potential for price undercutting or variation.
Charles developing a signature appetizer that becomes popular in Trident will impede Nola and Charles' efforts to collude as customers may prioritize the unique appetizer and focus less on party planning services, potentially leading to a decrease in demand for their services.
Nola lowering her price on national television will aid Nola and Charles' efforts to collude as it creates an expectation of lower prices, making it easier for them to maintain higher prices and discouraging potential competitors from entering the market.