A manufacturer with 65% market share is discouraging wholesalers from selling competing products. This agreement is illegal because it violates what?

A manufacturer with 65% market share is discouraging wholesalers from selling competing products. This agreement is illegal because it violates what?

• A. Controls resale prices
• B. Prohibits monopolies
• C. Violates antitrust laws
• D. Limits producers' rights

Answer: (C)

The correct choice is based on the fact that the manufacturer’s actions directly infringe upon established antitrust laws. These laws are designed to promote fair competition and prevent monopolistic behaviors that can harm consumers and other businesses. By discouraging wholesalers from selling competing products, the manufacturer is attempting to control the market, limiting competition and potentially leading to higher prices or reduced choices for consumers. Antitrust laws specifically target practices that create unfair advantages for certain businesses at the expense of a competitive marketplace. Such actions can lead to a dominant position that could stifle innovation and economic growth. Therefore, this behavior not only violates the spirit of competition but also goes against the legal framework designed to uphold market fairness.

The correct choice is based on the fact that the manufacturer’s actions directly infringe upon established antitrust laws. These laws are designed to promote fair competition and prevent monopolistic behaviors that can harm consumers and other businesses. By discouraging wholesalers from selling competing products, the manufacturer is attempting to control the market, limiting competition and potentially leading to higher prices or reduced choices for consumers.

Antitrust laws specifically target practices that create unfair advantages for certain businesses at the expense of a competitive marketplace. Such actions can lead to a dominant position that could stifle innovation and economic growth. Therefore, this behavior not only violates the spirit of competition but also goes against the legal framework designed to uphold market fairness.