[Adult Floaters] Adam and Zach are both involved in businesses that manufacture bathing suits with small personal flotation devices implanted to assist with swimming. They both ship the suits to different states around the country. Adam and Zach get together and decide to raise their prices. They decide that since they are the only two manufacturers of this type of suit, if they both stick together and raise prices to an agreed upon amount, then consumers will be forced to pay that amount. They want to make a lot of money before anyone else jumps into the market. Adam's disgruntled secretary finds out about the agreement and sends out letters to consumers revealing the agreement.
-In attempting to establish a violation of the Sherman Act, what type of trade violation would the government most likely allege?

Question

Quizplus · Accepted Answer

Adam and Zach's agreement to raise prices constitutes a horizontal restraint because it involves companies at the same level of the market agreeing to fix prices, which directly impacts competition.

[Adult Floaters] Adam and Zach Are Both Involved in Businesses