The U.S. Department of Justice investigated whether the four major U.S. airlines were colluding. Some analysts believed the airlines were restraining increases in capacity by failing to buy more planes or fly additional routes in order to reduce pressure to cut ticket prices. An airline industry analyst commented on the investigation, “I don’t sense that the executives talk to each other. They actually hate each other, truth be told. But with so few of them left, there’s almost a natural oligopoly.”

a. What does the analyst mean by “a natural oligopoly”?

b. Would it be necessary for the airline executives to talk to each other to collude? Briefly explain.