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1 point: The fact that universities offer a small number of products—
1 point: Factors that work against tacit collusion in the market for higher education include the large number of universities and the bargaining power of the better applicants.
1 point: Universities could engage in illegal collusion by holding meetings to establish uniform tuition rates, divvying up applicants so that each is accepted by a limited number of schools (to avoid competition), or sharing information on scholarship offerings so that applicants will receive similar offers from the competing schools.
1 point: Universities seek product differentiation in regard to athletic programs, facilities, academic standards, location, overseas programs, faculty, graduation requirements, and class size, among other areas.
1 point: Price leadership could be achieved in the university setting if one school, perhaps a large or prestigious university, announced its tuition early and then other schools based their tuition on that announcement.
1 point: Universities can engage in nonprice competition by offering better food, bigger dorm rooms, more accomplished faculty members, plush student centers, and similar amenities.