Competitive firms X, Y, and Z meet in secret and agree to charge the same price. The U.S. Justice Department discovers this agreement and would most likely file charges under the:
A) Clayton Act.
B) Federal Trade Commission Act.
C) Sherman Act.
D) Tying Contracts Act.

Question

Quizplus · Accepted Answer

The Sherman Act is the primary antitrust law that prohibits any agreement between competitors that restrains trade. The agreement among firms X, Y, and Z to charge the same price would likely be viewed as a price-fixing conspiracy and an illegal restraint of trade under the Sherman Act. The Clayton Act and the Federal Trade Commission Act also address antitrust practices, but they typically focus on specific types of conduct, such as mergers or unfair trade practices, rather than general agreements among competitors. The Tying Contracts Act pertains to contracts that require a buyer to purchase a separate product or service as a condition of obtaining the desired product or service, which is not relevant to the scenario described.

Competitive Firms X, Y, and Z Meet in Secret and Agree