Final answer:
The shoe repair company may be violating antitrust laws related to unfair competition and price fixing by buying out competitors and raising prices, a practice often designed to create a monopoly and eliminate market competition.
Step-by-step explanation:
When a shoe repair company buys out all the local shoe repair companies and then sharply raises prices once it becomes the only service provider in town, this scenario could be a violation of antitrust laws, specifically concerning unfair competition and price fixing. Antitrust laws exist to prevent businesses from engaging in practices that unfairly restrict competition, such as setting up monopolies or colluding with competitors to set prices. The situation described resembles a tactic known as 'predatory pricing,' where a company sets prices low to drive competitors out of the market, then raises prices once they have gained a dominant position.
This action defies antitrust laws because it leads to reduced competition, which can be detrimental to consumers. These laws are administered to forbid practices like these, ensuring that the market remains competitive and fair for other businesses and buyers. In some cases, the law allows manufacturers to suggest retail prices, but they cannot enforce minimum resale price maintenance agreements, as this would also restrict competition.