The University of Kay and Kaytech University are bitter cross-town rivals.They compete in everything from sports to academics.Due to decreasing enrollment,the schools make an agreement to give all incoming students free tuition for one semester before raising the existing rates the following semester.This action is most likely to be considered a
A) horizontal agreement in violation of the Sherman Act.
B) vertical agreement in violation of the Sherman Act.
C) tying agreement in violation of the Clayton Act.
D) reciprocal dealing agreement violating the Clayton Act.
E) licensing agreement violating the Clayton Act.

Question

Quizplus · Accepted Answer

The arrangement between University of Kay and Kaytech University is most likely to be considered a horizontal agreement in violation of the Sherman Act. Courts hold that the sharing among competitors of product information, pricing policies, and territorial allocations is not going to increase competition. Indeed, the anticompetitive results of this sharing causes such arrangements to be viewed as illegal per se.

The University of Kay and Kaytech University Are Bitter Cross-Town