Accounting Multiple Choice Question – 23 July 2025

It is reported that two large listed companies recently colluded with each other to fix the price of a product they both sell in the UK market.

Collusion of this type is an example of market failure due to?

Select ONE answer:

1. Inequality of resources
2. External costs
3. Market power
4. Resource immobility

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == >    Collusion is an example of market power exerted by a few suppliers.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.