Suppose that two soft drink manufacturers, Fizzy Pop and Spritzy Soda, agree to charge the same prices for their soft drinks. This practice is
A) always legal under the antitrust laws.
B) legal as long as Herfindahl-Hirschman index is less than 1,000.
C) legal as long as the firms had a cost justification for setting prices.
D) always illegal under the antitrust laws.

Question

Quizplus · Accepted Answer

Price-fixing agreements between competitors, like the one described, are considered per se illegal under antitrust laws, such as the Sherman Act in the United States, regardless of the market concentration or cost justifications.

Suppose That Two Soft Drink Manufacturers, Fizzy Pop and Spritzy