Chapter 64, Problem 7MCQ

To determine

To state: Whether price fixing is illegal, unheard of, only seen in monopolies, encouraged by the federal trade commission, or is common among perfectly competitive firms in the country U.

Answer to Problem 7MCQ

The correct option is E i.e., illegal.

Explanation of Solution

In the country U, price fixing is regarded as illegal.

Price fixing is usually defined as an agreement (verbal, or (written, or concluded from conduct) among competitors to lower, raise, stabilize, or maintain prices or price levels.

In general, the antitrust laws state that each company should set prices and other competitive terms on their own, instead of agreeing with that of a competitor.

Economics Concept Introduction

Introduction:

Price fixing is usually defined as an agreement (verbal, or (written, or concluded from conduct) among competitors to lower, raise, stabilize, or maintain prices or price levels.

In general, the antitrust laws state that each company should set prices and other competitive terms on their own, instead of agreeing with that of a competitor.