Fact Pattern 16-2
Number One Oil Company sells gas to various gas stations. Number One requires that the gas stations agree that they will not sell gas above a certain maximum price set by Number One. Some of the gas stations are unhappy with the arrangement because they wish to sell gas at any price they choose. Unfortunately for them, other oil companies in the region also impose maximum price restrictions. The station owners begin investigating whether any antitrust violation could be involved.
-Refer to Fact Pattern 16-2.Which of the following best describes the situation by which Number One Oil Company and other companies impose maximum price restrictions?
A) Horizontal price-fixing
B) Vertical price-fixing
C) Adverse price-fixing
D) There is no antitrust term for the practice.

Question

Quizplus · Accepted Answer

The situation described is an example of vertical price-fixing, as it involves the imposition of maximum price restrictions by the supplier (Number One Oil Company) on the buyer (gas stations). This type of price-fixing is generally considered illegal under antitrust law because it reduces competition and harms consumers by limiting their ability to choose among different products and prices.

Fact Pattern 16-2 Number One Oil Company Sells Gas to Various Gas Stations