Margaret tells the members of the Raleigh Association of Restaurant Owners that they will be able to get a better price on linen supplies (tablecloths, napkins) if they will deal with one supplier rather than split their business between two. They all know Margaret deals with Niagara Linen rather than Cayuga. Under the Sherman Act, if they all sign contracts with Niagara:
A) there is no violation since there is no express agreement to boycott Cayuga.
B) illegality may be implied from this conduct.
C) there is no concerted action.
D) this is horizontal market allocation.

Question

Quizplus · Accepted Answer

Illegality may be implied from this conduct under the Sherman Act because the collective decision to exclusively deal with one supplier, based on Margaret's suggestion, could be seen as a concerted effort that restricts competition and potentially harms another competitor (Cayuga) without a justifiable competitive reason. This could be interpreted as an anti-competitive practice.

Margaret Tells the Members of the Raleigh Association of Restaurant