Question

Sedres, Inc. is the manufacturer of the current best-selling TV video game system. Sedres will not sell parts for repair of the systems to anyone other than its authorized dealers. All Sedres authorized dealers are required to send used parts back to Sedres. Sedres will terminate an authorized dealer if it uses non-Sedres parts for repairs. Sedres' policies on dealers:A) constitute violations of the Sherman Act.B) are simply valid quality control mechanisms.C) are valid since no one is barred from entry.D) would be violations only if there were no other TV video game manufacturers.

Answer 1

Answer: Option(A) is correct

Explanation:

Sherman Act is the act that describes restrictions on mechanism that do not permit happening of interstate commerce .It permits regulation of competition in market among companies.

According in to the question Sedres Inc. is restricting interstate commerce in terms of dealer as it is involved in working with authorized dealer,returning the parts if damaged,no usage of non-Sedres parts etc. which shows no interstate marketing mechanism.  

Other options are incorrect because policies of Sedres is not depicting actual quality control flow,validity due to restriction in entry and other companies were not present for manufacturing TV video games.Thus, the correct option is option(A).