1.In a market with few sellers, a dominant firm sometimes acts as a "price leader," while less dominant firms play "follow the leader," by deliberately raising their prices to match the leader's prices exactly, without making any explicit agreement among themselves or with the price leader. Which of these best describes this practice?

It is a form of vertical price fixing, since the dominant firm is "above" the others in terms of market share

It is both legal and ethical, since no explicit ("naked") agreement has taken place

It is an illegal tying arrangement, since other firms in the market are tying their price to that of the leader

It is generally considered to be unethical because it involves the attempt by firms that should be competing to avoid competing, even though there is no explicit agreement