What term refers to an agreement among firms to charge the same price for a good?

• A. Price discrimination
• B. Price gouging
• C. Price ceiling
• D. Price fixing

Answer: (D)

Price fixing refers to an agreement among competing firms to charge the same price for a good. This collusion eliminates price competition, letting the companies keep prices artificially high and control market conditions rather than allowing supply and demand to determine them. It’s illegal in many places because it harms consumers by reducing choices and keeping costs higher.

The other terms describe different pricing ideas: price discrimination means charging different prices to different customers based on who they are or when they buy; price gouging is dramatic price increases during emergencies when demand spikes; a price ceiling is a legally imposed maximum price, not an industry-wide agreement.