Smith refers to collusion, which occurs when two companies in an oligopoly make an agreement to fix their prices to maximize their profits. This usually happens when there are a few companies in the industry. If one company raises its prices, customers will go to its competitor. But if two competitors raise their prices, customers will have no choice but to buy in any of these companies.
References
Academic.Tips. (2022) 'What tendency within capitalism is Smith referring to in the following quotation? Explain why it may come about. People of the same trade seldom meet together even for merriment and diversion, but the conversation ends in a conspiracy against the public or contrivance to raise prices. – Adam Smith, The Wealth of Nations, Book IV, Chapter VII, p.145, para. c27'. 11 February.
Reference
Academic.Tips. (2022, February 11). What tendency within capitalism is Smith referring to in the following quotation? Explain why it may come about. People of the same trade seldom meet together even for merriment and diversion, but the conversation ends in a conspiracy against the public or contrivance to raise prices. – Adam Smith, The Wealth of Nations, Book IV, Chapter VII, p.145, para. c27. https://academic.tips/question/what-tendency-within-capitalism-is-smith-referring-to-in-the-following-quotation-explain-why-it-may-come-about-people-of-the-same-trade-seldom-meet-together-even-for-merriment-and-diversion-but-the/
References
Academic.Tips. 2022. "What tendency within capitalism is Smith referring to in the following quotation? Explain why it may come about. People of the same trade seldom meet together even for merriment and diversion, but the conversation ends in a conspiracy against the public or contrivance to raise prices. – Adam Smith, The Wealth of Nations, Book IV, Chapter VII, p.145, para. c27." February 11, 2022. https://academic.tips/question/what-tendency-within-capitalism-is-smith-referring-to-in-the-following-quotation-explain-why-it-may-come-about-people-of-the-same-trade-seldom-meet-together-even-for-merriment-and-diversion-but-the/.
1. Academic.Tips. "What tendency within capitalism is Smith referring to in the following quotation? Explain why it may come about. People of the same trade seldom meet together even for merriment and diversion, but the conversation ends in a conspiracy against the public or contrivance to raise prices. – Adam Smith, The Wealth of Nations, Book IV, Chapter VII, p.145, para. c27." February 11, 2022. https://academic.tips/question/what-tendency-within-capitalism-is-smith-referring-to-in-the-following-quotation-explain-why-it-may-come-about-people-of-the-same-trade-seldom-meet-together-even-for-merriment-and-diversion-but-the/.
Bibliography
Academic.Tips. "What tendency within capitalism is Smith referring to in the following quotation? Explain why it may come about. People of the same trade seldom meet together even for merriment and diversion, but the conversation ends in a conspiracy against the public or contrivance to raise prices. – Adam Smith, The Wealth of Nations, Book IV, Chapter VII, p.145, para. c27." February 11, 2022. https://academic.tips/question/what-tendency-within-capitalism-is-smith-referring-to-in-the-following-quotation-explain-why-it-may-come-about-people-of-the-same-trade-seldom-meet-together-even-for-merriment-and-diversion-but-the/.
Work Cited
"What tendency within capitalism is Smith referring to in the following quotation? Explain why it may come about. People of the same trade seldom meet together even for merriment and diversion, but the conversation ends in a conspiracy against the public or contrivance to raise prices. – Adam Smith, The Wealth of Nations, Book IV, Chapter VII, p.145, para. c27." Academic.Tips, 11 Feb. 2022, academic.tips/question/what-tendency-within-capitalism-is-smith-referring-to-in-the-following-quotation-explain-why-it-may-come-about-people-of-the-same-trade-seldom-meet-together-even-for-merriment-and-diversion-but-the/.