Precision Parts Corporation and Quality Gears,Inc

question 55

Essay

Precision Parts Corporation and Quality 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 Quality Gears agree that Precision Parts will no longer sell in Minnesota and that Quality Gears will no longer sell in North and South Dakota.Have Precision Parts and Quality 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:

Direct Material Purchased

The raw materials acquired that are directly used in the manufacturing of a product.

Actual Overhead Cost

The real expenses incurred during production that are not directly tied to specific products, including electricity, rent, and managerial salaries.

Direct Labour-Hours

The total hours worked by employees that are directly involved in the manufacturing process of a product.

Overapplied Overhead

A condition where the overhead applied to products or services exceeds the actual overhead costs incurred.