Fact pattern 17-1
Patty owns and operates a gym.Her main competitor is Jason who runs another gym three streets from her.They cater to the same clientele.Patty and Jason keep trying to undercut each other in order to attract customers.One evening Patty sees Jason in the local coffee shop and sits down to talk with him.They discuss how difficult it is to do upgrades and make money with the prices they are charging.Patty winked at Jason and said "You know,charging $80 per month would enable a good profit margin." The next day Patty started charging $80 per month as did Jason.Customers started complaining particularly after another coffee drinker and gym customer at a table sitting at a table near Patty and Jason made it known that they had seemed very cozy.Patty and Jason deny any agreement to set the same price for gym membership.They avow that the decision was made by each of them independently.
-Refer to fact pattern 17-1.Frank,a first year law student and gym member,is suspicious; but he does not know what violation to claim.Which of the following is the correct term for an illegal agreement by providers of the same good or service to charge a set fee?

Question

Quizplus · Accepted Answer

Patty and Jason, who are competitors in the same market, allegedly discussed and agreed to charge the same fee for their gym membership. This is an example of horizontal price fixing, which is an illegal agreement between competitors to set a uniform price for a particular product or service.

Fact Pattern 17-1 Patty Owns and Operates a Gym.Her Main Competitor Is Jason