[Adult Floaters] Adam and Zach Are Both Involved in Businesses

question 49

Multiple Choice

[Adult Floaters] Adam and Zach are both involved in businesses that manufacture bathing suits with small personal flotation devices implanted to assist with swimming. They both ship the suits to different states around the country. Adam and Zach get together and decide to raise their prices. They decide that since they are the only two manufacturers of this type of suit, if they both stick together and raise prices to an agreed upon amount, then consumers will be forced to pay that amount. They want to make a lot of money before anyone else jumps into the market. Adam's disgruntled secretary finds out about the agreement and sends out letters to consumers revealing the agreement.
-In attempting to establish a violation of the Sherman Act, what type of trade violation would the government most likely allege?

• A) A vertical restraint
• B) A horizontal restraint
• C) A corresponding restriction
• D) An agreed restriction
• E) A rule-of-reason restriction

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Definitions:

Assignor

An assignor is a person or entity that transfers rights or interests in a particular property, contract, or other asset to another party, called the assignee.

Obligor

A contractual party who agreed to do something for the other party.

Merger Clause

A clause in a written agreement within the statute of frauds that states that the written agreement accurately reflects the final, complete version of the agreement.

Statute of Frauds

A legal principle that requires certain types of contracts to be written and signed to be enforceable.