Security Services, Inc. and Redline Protectors were the two predominant provider
ID: 448467 • Letter: S
Question
Security Services, Inc. and Redline Protectors were the two predominant providers of home alarm systems in the Dallas area. They had become the two big businesses after the smaller competitors left the market that was becoming dominated by Security and Redline. One of the smaller competitors complained that Security and Redline seemed to always change their product pricing to the same new level, at the same time, moving prices down to clear out competition, then raising prices, but always at about the same time.
Which of the following is most correct about this situation?
While illegal antitrust activity might be inferred from the behaviors noted here, an express agreement to fix prices at a certain level is the only way to meet the required level of proof.
Because prices are dictated by the market economy, it is common for companies to have the same price, so identical pricing and changes at the same time will not suggest an antitrust violation.
A meeting of the minds between the competitors can be inferred by demonstration of conscious parallelism.
None of the above is true.
A.While illegal antitrust activity might be inferred from the behaviors noted here, an express agreement to fix prices at a certain level is the only way to meet the required level of proof.
B.Because prices are dictated by the market economy, it is common for companies to have the same price, so identical pricing and changes at the same time will not suggest an antitrust violation.
C.A meeting of the minds between the competitors can be inferred by demonstration of conscious parallelism.
D.None of the above is true.
Explanation / Answer
Answer:
While illegal antitrust activity might be inferred from the behaviors noted here, an express agreement to fix prices at a certain level is the only way to meet the required level of proof.
Though it is not sufficient to prove that it is illegal antitrust activity as there are many other factors as well, but happening these price changes repeatitively kind of indicates towards antitrust activity.
A.While illegal antitrust activity might be inferred from the behaviors noted here, an express agreement to fix prices at a certain level is the only way to meet the required level of proof.
Though it is not sufficient to prove that it is illegal antitrust activity as there are many other factors as well, but happening these price changes repeatitively kind of indicates towards antitrust activity.
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