Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A company merging with a direct competitor to increase market share
B
A company lowering prices to attract more customers in a competitive market
C
A business collaborating with local suppliers to improve supply chain efficiency
D
A startup launching a new product in an emerging market segment
Understanding the Answer
Let's break down why this is correct
Answer
A violation would occur if companies agreed to set the same price for a product, such as two major soda makers telling each other to charge $1. 50 for a can of soda and refusing to sell below that. This is a classic example of price‑fixing, a direct restraint of trade that the Sherman Act forbids. The reasoning is that such agreements eliminate competition, allowing firms to raise prices and reduce consumer choice. If the firms instead competed independently, each could set its own price and consumers would benefit from lower prices or better quality.
Detailed Explanation
When two rival companies merge, they may control a large portion of the market. Other options are incorrect because Lowering prices to win customers is called healthy competition, not a monopoly; Working with suppliers to get better materials is a normal business practice.
Key Concepts
Antitrust legislation
Market competition
Corporate mergers
Topic
Sherman Antitrust Act
Difficulty
hard level question
Cognitive Level
understand
Practice Similar Questions
Test your understanding with related questions
1
Question 1Which of the following statements accurately reflect the principles and goals of the Sherman Antitrust Act? Select all that apply.
easyHistory
Practice
2
Question 2Which scenario best illustrates the enforcement of the Sherman Antitrust Act?
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Practice
3
Question 3Which of the following scenarios best exemplifies a violation of the Sherman Antitrust Act?
mediumHistory
Practice
4
Question 4Which of the following actions are typically considered as enforcement measures under the Sherman Antitrust Act? (Select all that apply)
mediumHistory
Practice
5
Question 5Which of the following scenarios best exemplifies the application of the Sherman Antitrust Act in its historical context?
mediumHistory
Practice
6
Question 6Which of the following statements accurately reflect the implications and historical context of the Sherman Antitrust Act? (Select all that apply)
mediumHistory
Practice
7
Question 7Which of the following cases best exemplifies the application of the Sherman Antitrust Act in the context of regulating monopolies, and why?
mediumHistory
Practice
8
Question 8Which of the following actions exemplify the application of the Sherman Antitrust Act in regulating monopolies? Select all that apply.
hardHistory
Practice
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