XYZ Inc. manufactures widgets and sells them through various wholesale dealers. Several other firms also manufacture widgets. Of course, XYZ wishes to conduct its business within the bounds of the law, including the rules of antitrust law. As you study this chapter, consider the following questions regarding possible courses of action and their treatment under antitrust law:

1. Would XYZ violate antitrust law if XYZ deliberately causes its prices to match those of a competing widget manufacturer?

2. If XYZ and a competing widget manufacturer agree that each will charge no more than a certain agreed amount for their widgets (i.e., a maximum price), is there an antitrust violation? What if XYZ and its competitor agree to set a minimum price in order to avoid what each sees as the potentially ruinous consequences of a price-cutting war?

3. Is there an antitrust violation if XYZ and its wholesale dealers agree that the dealers will adhere to an established maximum sale price when they sell to retailers? What if the agreement between XYZ and the dealers is that the dealers will adhere to a certain minimum price when they sell to retailers?

4. If XYZ and its wholesale dealers agree on exclusive sales territories within which each dealer will operate, is there an antitrust violation?

Answer rating: 100% (QA)

1 Yes XYZ would likely violate antitrust law if they deliberately cause their prices to match those ... View the full answer