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Question
You are representing a group of producers accused of collusion. There is no evidence that the producers entered into any explicit agreement to fix prices or allocate customers. Unfortunately (or fortunately) you have drawn Judge Richard Posner (in one of his last cases before he retires), who cares as much about economic indicia of collusion as he cares about smoking gun evidence of a literal agreement. Counsel for the plaintiff introduces evidence that the product is relatively homogeneous, that there are only 3 or 4 significant producers (your clients), and that your clients regularly convey information to one another through public statements and occasionally at industry conventions. In addition, counsel for plaintiffs point out that entry is difficult and prices are well above your clients' marginal costs. Finally, they note that because your clients have all been operating practically at capacity, they have no ability to "cheat" on their tacit agreement.
Quick Computing currently sells 9 million computer chips each year at a price of $11 per chip. It is about to introduce a new chip
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