Respuesta :
The Correct Answer is - Option (3) Practices that reduce competition without outright agreements to raise price or reduce quantity.
What are Restrictive Practices?
- Antitrust law includes rules against restrictive practices—practices that do not involve outright agreements to raise price or to reduce the quantity produced, but that might have the effect of reducing competition
- Antitrust cases involving restrictive practices are often controversial, because they delve into specific contracts or agreements between firms that are allowed in some cases but not in others.
- For example, if a product manufacturer is selling to a group of dealers who then sell to the general public it is illegal for the manufacturer to demand a minimum resale price maintenance agreement, which would require the dealers to sell for at least a certain minimum price.
- . A minimum price contract is illegal because it would restrict competition among dealers. However, the manufacturer is legally allowed to “suggest” minimum prices and to stop selling to dealers who regularly undercut the suggested price.
Key Concepts and Summary
Antitrust laws prevent businesses from openly collaborating to create cartels that would lower output and increase prices. Companies occasionally try to circumvent these constraints in other ways, and as a result, several antitrust actions involve anticompetitive tactics such tie-in sales, bundling, and predatory pricing.
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Correct Question - Restrictive practices are characterized as :
1) Practices that prevent firms from entering certain markets.
2) Practices that restrict the number of consumers who may purchase a product
3) Practices that reduce competition without outright agreements to raise price or reduce quantity
4) Practices that promote competition by restricting monopolies.
