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Q. d- For Critical Thinking

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Economics Today
Found in: Page 613

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Short Answer

Why do you suppose that nearly all of the world's antitrust authorities agree that collusive conspiracies to restrain trade and fix prices are illegal?

In economics and market competition, collusion occurs when rival companies collaborate for mutual benefit. As a trade and competition restraint, the Court's decision prohibited all such price-fixing agreements.

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Step by Step Solution

Step1: Introduction.

Any Governmental Authority charged with trying to enforce, applying, administering, or investigating any Antitrust Laws, including the United States, is referred to as an Antitrust Authority.

Step2: Collusive conspiracies. 

Collusion occurs within an industry in the study of economics and market competition when rival companies cooperate for their mutual advantage. Conspiracy typically entails an agreement between two or more vendors to take action to suppress market competition between sellers.

Step3: Antitrust Act.

The Court's decision overturned a nearly century-old rule that prohibited all such price-fixing agreements as a trade and competition restraint. All practices restraining commerce are illegal under the Sherman Antitrust Act of 1890.

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