By contract, Quintessent Metals Corporation forbids Rad Refining, Inc., a wholesale buyer of Quintessent's products, from purchasing the products of Quintessent's competitors. This exclusive-dealing contract is allowed

Question

Quizplus · Accepted Answer

Exclusive dealing contracts are allowed unless their effect is to substantially lessen competition. In this case, the contract forbidding Rad Refining, Inc. from purchasing the products of Quintessent's competitors may indeed lead to a substantial lessening of competition in the relevant market, as it could limit the ability of competitors to gain market share and compete on price or other terms. Therefore, this type of contract would be closely scrutinized under antitrust rules.

By Contract, Quintessent Metals Corporation Forbids Rad Refining, Inc