Cooperation among oligopolies runs counter to the public interest because it leads to underproduction and high prices. In an effort to bring resource allocation closer to the social optimum, public officials attempt to force oligopolies to compete instead of cooperating. Consider the following scenario:

Suppose that the leaders of several oil corporations hold a secret meeting in the Cayman Islands where they agree to restrict fuel output in order to boost prices. As a result of the higher fuel prices, an airline company loses billions of dollars. This airline company could recover three times the damages it has sustained by suing the appropriate oil corporations under which of the following laws?

a. The Celler–Kefauver Act of 1950

b. The Clayton Act of 1914

c. The Sherman Antitrust Act of 1890

d. The Robinson–Patman Act of 1936

Named after judge Henry De Lamar Clayton (1857-1929), The Clayton Act of 1914 prohibits antitrust business practices, predatory pricing, anticompetitive mergers, and unethical organizational behavior. The Antitrust Division of the Department of Justice enforces the legislation covered on corporate practices forbidden by the Federal Trade Commission (FTC).

Thus, in the case, the airline company affected by the collision of the oil drillers that had oil hidden in the Cayman island can suit the company promoting such unethical organizational practice to be compensated for the losses incurred.