What is a group of businesses that agree to fix prices?
A cartel is a collection of independent businesses or organizations that collude in order to manipulate the price of a product or service. Cartels are competitors in the same industry and seek to reduce that competition by controlling the price in agreement with one another.
What are the types of price fixing?
Vertical Price Fixing. Price fixing among marketplace competitors is called horizontal price fixing, whereas fixing prices along the supply chain is called vertical price fixing.
Is price fixing good or bad?
Economists generally agree that horizontal price-fixing agreements are bad for consumers. Price-fixing agreements, since they reduce competitors’ ability to respond freely and swiftly to one another’s prices, diminish consumer surplus by interfering with the competitive marketplace’s ability to keep prices low.
What is price fixing scheme?
Agreements between competitors to fix prices, to allocate customers or geographic markets, or to restrict production of a product by setting quotas among competitors or other means are considered to be “hard-core” cartel activities, with no socially redeeming features. …
What is per se concept?
Per se is a Latin phrase literally meaning “by itself.” It has the sense of “intrinsically,” or “in and of itself.” In everyday speech, it’s commonly used to distinguish between two related ideas, as in, “He’s not a sports fan per se, but he likes going to basketball games.”
What is the rule of reason and how does it differ from the per se rules?
While some actions like price-fixing are considered illegal per se, other actions, such as possession of a monopoly, must be analyzed under the rule of reason and are only considered illegal when their effect is to unreasonably restrain trade.
What is the difference between the rule of reason and the per se rule?
The rule of reason is exactly opposite to the Per Se Rule, that is, the informant holds the onus of proving the information alleged by them or any anti-competitive agreement claimed by them. Consequently, the Rule of Reason is applied. …