Question

Suppose that the presidents of two auto manufacturing companies exchange text messages in which they discuss jointly raising prices on their new lines of hybrid SUVs. Which law does this illegal communication violate?

Answer 1

Answer:

Sherman Antitrust Act of 1890

Explanation:

Based on the information provided within the question it can be said that this communication is violating the Sherman Antitrust Act of 1890. This Act was passed prohibiting any contract, trust, or conspiracy in restraint of interstate or foreign trade in order to prevent oppressive business practices and monopolies. This is what the two companies are doing by agreeing to jointly raise the price they are able to control the entire markets price thus creating a monopoly in the automotive industry, which forces consumers to pay a lot more than what the vehicles are actually worth.