An investigation by the competition regulator has revealed that three major agricultural chemical producers colluded to fix prices and allocate geographic territories to guarantee high profit margins. In one instance, a bulk shipment of nitrogen-based fertiliser was sold to farming cooperatives at £420 per tonne, when a competitive market price would have been around £190 per tonne. The manufacturers claim that high research and development costs justify their pricing structures.
With reference to the extract above and your knowledge of economics, analyse the possible disadvantages faced by consumers from collusion between firms.
