Agreeing with other members of the industry on the price to charge is known as collusion. Collusion is defined as “acting in concert without any formal agreement… [it] is common when antimonopoly legislation makes explicit agreements illegal or unenforceable.” Its existence is [sometimes] extremely difficult to prove” Black et al (2012). As part of this analysis, I will explain what collusion is, its different types, why companies can enter into this agreement, then I will present a past example and finally I will explain why this tacit or verbal agreement can fail. Collusion agreements or cartels can, however, be created by governments to protect and positively influence markets, for example the American sugar manufacturing cartel (operating between 1934 and 1974) and OPEC, which is still active today. 'today. Collusive behavior only exists within an oligopolistic market. structure due to the extreme mutual interdependence of companies. Some examples of markets where oligopolies can be found are the tobacco industry, soft drinks and gas distribution. Parkin et al. (2008). An oligopoly is defined as “a few sellers [that] dominate the market…[it] may have dozens or even hundreds of individual firms, but most of them are unimportant in the industry; a small number of them… dominate the industry. California State University Department of Economics. (2014) there are two unique characteristics within oligopoly that are not observed in any other market structure; they are mutual interdependence and repeated interaction. Others include “high concentration, either a homogeneous or differentiated product, or high and low barriers to entry” Dawson, Chris (2013). “Mutual interdependence exists when the actions of one company [have] a major impact on other companies. in the middle of the document...that this was the only reason this collusive deal failed.ConclusionIn conclusion, the temptation for a company to enter into a cartel or collusive deal may not only be to fuel rising profits and sales. Some organizations may enter into these agreements not for the sole purpose of increasing their profits, this is clearly seen through the creation of OPEC which helps both consumers and producers with development and stability. However, as the BA and Virgin Atlantic scandal shows, this is the most common use of this agreement. The negative side of these types of agreements, which are purely selfish and only help the producer, is obvious. Furthermore, it is clear why this deal failed, given that the key part of any deal is the trusts and that is what Virgin broke down. There was no foreseeable way that this collusive agreement would continue..