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Marissa Is the CEO of Motormax Inc, a Generic Auto

Question 9

Multiple Choice

Marissa is the CEO of Motormax Inc, a generic auto parts manufacturer that does business with several large auto manufacturers. Parts manufacturing is a highly competitive business. Several years ago she was contacted by the CEO of a competitor who asked whether Motormax would like to "go in with them." Marissa did not understand what he meant at the time and replied in the negative, but the more she thought about the incident over the years she realized that the rival's CEO was proposing a conspiracy to reduce competition. She has begun to notice that the pricing of her competitors' products is always suspiciously the same as hers. Which of the following is TRUE?


A) Conscious parallel pricing by parts manufacturers is a criminal offence.
B) Agreements to fix prices are only reviewable if the price is lower than the cost of production and the intention of the parties to the agreement is to drive competitors out of the market.
C) The actions of the other parts manufacturers is a criminal office only if an agreement to lessen competition unduly can be proven.
D) Any agreement to fix prices is a reviewable practice but not a criminal offence.
E) Any agreement to fix prices is a criminal offence.

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