If Penn Hills Mfg

question 91

Multiple Choice

If Penn Hills Mfg.Corp.gives the Johnstown Distributing Co.the exclusive right to distribute Penn Hills' products in Ohio-with the understanding that Johnstown can't sell Penn Hills' products outside Ohio or to other wholesalers in Ohio,this arrangement:

• A) Would definitely be ILLEGAL because the courts have ruled that all vertical arrangements between producers and intermediaries are illegal.
• B) May or may not be LEGAL-the courts would weigh the possible good effects of this vertical arrangement against possible restrictions on competition.
• C) Would definitely be LEGAL because the courts have ruled that all vertical arrangements between producers and intermediaries are legal.
• D) Would definitely be ILLEGAL because the courts have ruled that all horizontal arrangements between competitors are illegal.
• E) Would definitely be LEGAL because the courts have ruled that all horizontal arrangements between competitors are legal.

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