Ed was an independent owner of a chain of TV stores.He successfully got customers into his store by cutting his prices on widely advertised name-brand products in order to sell other products for which he received a bigger profit.When the manufacturers of three of the name-brand products discovered Ed's actions,they agreed secretly to stop selling him their TVs.The three manufacturers
A)are doing nothing illegal,as they did not get Ed to agree to anything.
B)are free to agree not to deal with Ed since the public can go elsewhere and will not be hurt economically.
C)can choose either as a group to deal or not to deal with any retailer they want.
D)are engaged in a rule of reason violation of the antitrust laws if their action harms competition.

Question

Quizplus · Accepted Answer

The manufacturers' actions could be seen as a violation of the rule of reason, which prohibits actions that harm competition, even if they are not outrightly illegal. By agreeing to stop selling to Ed, they are potentially limiting consumer options and raising prices, which could be detrimental to competition.

Ed Was an Independent Owner of a Chain of TV