Imperfect Competition: Tacit Collusion

Imagine that you are the owner of a firm. You would like your firm to enter the market in an area where there is imperfect competition and possible tacit collusion. Analyze the market environment to determine whether or not it would be a wise strategy for you to enter the market.

Write a three to five (3-5) page paper that answers the following:

1.      Analyze a market environment with tacit collusion, including deterrents from entry.

2.      Evaluate the profitability of entering the market.

3.      Examine how the time horizon affects the profitability of entering the market.

4.      Determine whether or not you should enter the market and justify your answer.

Thank you