The language of Section 1 of the Sherman Act prohibits every contract that restrains trade,and the courts have interpreted this prohibition literally so as to invalidate all such contracts.

Question

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The courts have not interpreted the prohibition in Section 1 of the Sherman Act literally to invalidate all contracts that restrain trade. Instead, they apply a "rule of reason" analysis to determine whether a particular contract's restraint of trade is unreasonable and thus illegal.

The Language of Section 1 of the Sherman Act Prohibits