Question

. If Amira and Sujat, during a family vacation, discuss the change of tire suppliers and make an agreement that neither would purchase tires from Tova Tires, has a conspiracy to restrain trade occurred between the two?

A) Yes, under the theory of conscious parallelism.

B) No, because there is not sufficient evidence of a concerted action.

C) Yes, a vertical restraint of trade has probably occurred.

D) Yes, a horizontal restraint of trade has probably occurred.

Answer 1

No, there is not sufficient evidence of a concerted action to suggest a conspiracy to restrain trade between Amira and Sujat.

Step-by-step explanation:

B) No, because there is not sufficient evidence of a concerted action.

In order for a conspiracy to restrain trade to occur, there needs to be evidence of a concerted action between the parties involved. In this case, Amira and Sujat discussing the change of tire suppliers and making an agreement not to purchase from Tova Tires does not necessarily indicate a coordinated effort to restrict trade. Simply having a conversation and reaching an agreement does not meet the criteria for a conspiracy. Therefore, the answer is B) No.

Answer 2

Amira and Sujat's agreement not to purchase tires from Tova Tires constitutes a horizontal restraint of trade, as it is a collaboration between competitors to restrict competition with a supplier.

Step-by-step explanation:

If Amira and Sujat, during a family vacation, discuss the change of tire suppliers and make an agreement that neither would purchase tires from Tova Tires, then a conspiracy to restrain trade, specifically a horizontal restraint of trade, has likely occurred.

A horizontal restraint of trade happens when competitors at the same level of the market agree to work together to restrict competition, such as by fixing prices, limiting production, or boycotting a supplier.

In this scenario, Amira and Sujat are engaging in a mutual understanding to not purchase from a specific supplier, hence they are directly collaborating to restrict trade with Tova Tires.

This is distinguished from a vertical restraint of trade, which would involve agreements between different levels of the production and distribution process, such as between manufacturers and retailers.