Question

Suppose that you overhear a foursome of physicians on the golf course discussing the prices they charge for an office visit. Suppose further that you hear them reach an agreement to all charge a fee of $100 for an office visit. What is such an agreement called in antitrust policy, and what antitrust law may have been violated?

Answer 1

The question states that there is a mutual agreement made among some of the physicians to charge $100 for one visit by a patient.

The agreement made in terms of a fixed price is called conspiracy in restraint of trade. In this case of price fixing, there is an agreement made among the group of suppliers. Here the group of physicians made a mutual agreement among themselves to fix the price at $100 per visit.

According to the section 1 of the Sherman Act. The network of physicians should not fix a price among themselves. This will impose certain difficulties for the consumers because it will create monopoly and consumers will be exploited in the market. Only if competitors are heard fixing prices.