Why is collusion between competitors informal?
Answers: It eliminates competition and creates an unreasonable market place. It is repeatedly used to drive competing stores or companies out of business. It forces consumers to pay an undue price for goods. If one and only a few businesses control a product and they agree to price fixing, they can essentially rob the consumer. It basically removes the unbroken concept of freedom from economics.
Collusion between competitors could lead to price fixing, because this would remove the competition. They could all agree to set a price at a fixed amount and we would hold to pay it. It would essentially exterminate the entire supply and demand view because they could set the price at whatever they needed and consumers would have no other choice. Without the competition, here would be chance of getting a lower price and consumers would be stuck paying the high price.