Precision Parts Corporation and Aligned Gears, Inc

question 64

Essay

Precision Parts Corporation and Aligned Gears, Inc., are competitors selling certain machine parts that are otherwise generally unattainable in their geographic market. This market includes the states of Minnesota, North Dakota, and South Dakota. Precision Parts and Aligned Gears agree that Precision Parts will no longer sell in Minnesota and that Aligned Gears will no longer sell in North and South Dakota. Have Precision Parts and Aligned Gears violated any antitrust law? If so, which one? Explain. If they had divided their market by type of customer rather than geographic are, would the result be the same? Why or why not?

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Definitions:

Negative Reinforcement

A behavior modification technique that involves the removal of an unpleasant stimulus to increase the likelihood of a desired response.

Positive Reinforcement

Any pleasant or desirable consequence that follows a response and increases the probability that the response will be repeated.

Punishment

A consequence that reduces the likelihood of a behavior being repeated in the future.

Shaping

A method of training or teaching that involves reinforcing behaviors that are progressively closer to the desired behavior.