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Discuss the Validity and Effect of Each of the Following

Question 67

Essay

Discuss the validity and effect of each of the following:
a. Two manufacturers of the same product decide to allocate territories, with one taking the southern States.
b. A labor union encourages its members and all consumers to boycott a product manufactured by a company that refuses to honor a union contract.
Carrin's Department Store sells its products for 10% under the suggested retail price. One
c. manufacturer tells the store it will not supply wholesale goods to it unless it charges at least the suggested retail price.

Correct Answer:

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a. This is a horizontal market allocation. It is a per se violation of Section 1 of the
Sherman Act.
b. This would be an illegal group boycott, except that it involves a labor union, and the
Clayton Act exempts labor unions from all antitrust laws.
Until recently it was considered a p...

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