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:

Retail Life Cycle

The process of growth, maturity, and decline that retail outlets, like individual product categories, undergo over time.

Sharp Departure

A significant or sudden change in direction or strategy, often implying a move away from traditional methods or norms.

Sales Per Square Foot

A metric used in retail to measure the efficiency of a store's sales relative to its physical size.

Financial Indicator

A metric used to gauge the financial health or performance of a business, market, or economy.