Fact Pattern 16-1 Patty Owns and Operates a Gym. Her Main Competitor Is

question 48

Multiple Choice

Fact Pattern 16-1
Patty owns and operates a gym. Her main competitor is Jason who runs another gym three streets from her. They cater to the same clientele. Patty and Jason keep trying to undercut each other in order to attract customers. One evening Patty sees Jason in the local coffee shop and sits down to talk with him. They discuss how difficult it is to do upgrades and make money with the prices they are charging. Patty winked at Jason and said "You know, charging $80 per month would enable a good profit margin." The next day Patty started charging $80 per month as did Jason. Customers started complaining particularly after another coffee drinker and gym customer at a table sitting at a table near Patty and Jason made it known that they had seemed very cozy. Patty and Jason deny any agreement to set the same price for gym membership. They avow that the decision was made by each of them independently.
-Refer to Fact Pattern 16-1.Is the fact that no express words passed between Patty and Jason a defense to charges of antitrust violation?

• A) Yes, because direct evidence is required in order to establish an illegal agreement to fix prices.
• B) Yes, both because direct evidence is required in order to establish an illegal agreement to fix prices and because the courts require evidence of an explicit agreement in such cases.
• C) It is a defense to charges of criminal antitrust violations, but not to civil antitrust violations.
• D) No, because a knowing wink can mean more than words.

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Definitions:

French

relates to France or its people, language, or culture, a country known for its historical influence on art, science, and philosophy.

Intolerable Acts

A series of punitive laws passed by the British Parliament in 1774 meant to punish the Massachusetts colonists for the Boston Tea Party.

Continental Congress

The assembly of delegates from the Thirteen Colonies which became the governing body of the United States during the American Revolution.

Philadelphia

A historic city in Pennsylvania, significant for its role in the early history of the United States, including the signing of the Declaration of Independence.