Discuss the validity and effect of each of the following: a. Two manufacturers of the same product decide to allocate territories, with one taking the southern States. b. A labor union encourages its members and all consumers to boycott a product

manufactured by a company that refuses to honor a union contract. c. Carrin's Department Store sells its products for 10% under the suggested retail price. One manufacturer tells the store it will not supply wholesale goods to it unless it charges at least the suggested retail price.

a.
This is a horizontal market allocation. It is aper se violation of Section 1 of the Sherman Act.

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b.
This would be an illegal group boycott, except that it involves a labor union, and the Clayton Act exempts labor unions from all antitrust laws.

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c. Until recently it was considered a per se violation of the antitrust laws for a manufacturer to agree with its retailers to set the minimum price the retailer could charge for the manufacturer's goods. However, in a 2007 U.S. Supreme Court case, the Court found that vertical price restraints are to be judged by the rule of reason.