Under a rule of reason approach, which of the following would be legal in the United States?
A) The merger of Paco's Taqueria and Maria's Mexican Bistro, independent restaurants in the unconcentrated sit-down restaurant market.
B) Price fixing between IBM and Compaq.
C) Ford and General Motors electing the same person to their boards of directors.
D) Kellogg's and General Mills collude to drive Quaker Oats out of the business.

Question

Quizplus · Accepted Answer

Under a rule of reason approach, only agreements that unreasonably restrain trade are deemed illegal. The merger of two independent restaurants does not create a substantial lessening of competition in the market, therefore it is legal.

B, C and D are all illegal under a rule of reason approach as they involve anticompetitive behavior such as price fixing, sharing of sensitive information, and collusion to eliminate a competitor from the market.

Under a Rule of Reason Approach, Which of the Following