Question

The University of Dover and Dover University are bitter cross town rivals. They compete in everything from sports to academics. The schools, because of shrinking enrollment, make an agreement to give all incoming students free tuition for one semester before raising the existing rates the following semester. This action would be considered:______.a) a horizontal restraint violating the Sherman Act.b) a vertical restraint violating the Sherman Act.c) a tying agreement in violation of the Clayton Act.d) price discrimination in violation of the Robinson-Patman Act.

Answer 1

Answer:

a) a horizontal restraint violating the Sherman Act

Explanation:

The Sherman Act of 1890 prohibited those activities that are restricted to the interstate and the competition arises in the market place

Here in the given situation, it is mentioned that the due to enrollment shrinking, it made the agreement for all the incoming students to give the free tuition for one semester

So this represents the horizontal restraint that consist of agreement within the same type of business with the motive of decreasing the competition