Why would a group of companies be willing to cooperate in price- fixing?

Why would a group of companies be willing to cooperate in price- fixing?
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1 Answer

Answer :

Because they can each make more money, individually.If competing companies actually compete then they will sell their product as cheaply as possible, since the customer is most likely to buy the cheapest option.  However, if the competing companies can agree to fix the price, then they can charge more money without losing out to another company who is willing to sell the product for cheaper.
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