Sherman Act Horizontal Price Fixing

The video explains the concept of per se illegality under the Sherman Act, focusing on price fixing agreements among competitors. It highlights that such agreements are illegal regardless of the fairness of the price. Exceptions exist when competitors independently follow a price without communication. The video also discusses the implications for both small and large competitors, emphasizing that even small businesses can violate this provision if they agree to set a minimum price.

What is considered per se illegal under the Sherman Act?

• Competitors raising prices

• Competitors lowering prices

• Competitors agreeing to fix prices

• Competitors setting prices independently

Under what condition is it generally legal for one competitor to follow another's pricing?

• When prices are lowered

• When prices are raised

• When there is no communication or agreement

• When there is a formal agreement

What remains in effect when one competitor follows another's pricing without agreement?

• Conspiracies

• Formal contracts

• Price fixing

• Market forces

Can small competitors violate the Sherman Act by agreeing to set a minimum price?

• No, only large competitors can

• Yes, regardless of their size

• Only if they have a formal contract

• Only if they have pro-competitive justification

What is not a valid justification for setting a minimum price under the Sherman Act?

• Agreement to set a minimum price

• Pro-competitive justification

• Survival of small businesses

• Allowing new entrants into the market