Gingrich Corp., the manufacturer of a supposedly exclusive brand of cat litter,
ID: 2731516 • Letter: G
Question
Gingrich Corp., the manufacturer of a supposedly exclusive brand of cat litter, believes that many of its retail dealers are lowering the retail price of the cat litter too far and are thereby jeopardizing the product's exclusive image. The following statements set forth possible courses of action for Gingrich to follow, as well as the legal consequences thereof. Which of the statements is/are accurate.
A. If Gingrich and its dealers agree that the dealers will charge a certain minimum price as well as a certain maximum price, and if Gingrich is sued for an alleged violation of Sherman Act Section 1, Gingrich will be allowed to argue that Section 1 was not violated because the agreement to fix maximum prices benefited consumers.Explanation / Answer
answer is C
C. Gingrich will not violate Sherman Act Section 1 if it unilaterally refuses to deal with dealers that fail to charge Gingrich's suggested retail price, but Gingrich must be careful not to cause the refusal to deal to become something more than a mere unilateral refusal because Sherman Act Section 1 delineates and prohibits specific means of anticompetitive conduct,and there is no violation of competitive forces and prohibit of trade
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