McDonalds, Burger King, and Wendy\'s agree to divide up the Florida Keys into th
ID: 444002 • Letter: M
Question
McDonalds, Burger King, and Wendy's agree to divide up the Florida Keys into three exclusive territories with McDonalds having Key Largo and the northern Keys, with Burger King having Marathon the middle Keys, and with Wendy's having Key West and the lower Keys. They agree not to compete with each other in the others' territories. This agreement is:
Illegal per se horizontal territorial division pursuant to the Sherman Act
Illegal per se vertical territorial division pursuant to the Sherman Act
Legal if the three fast-food chains can convince the court that by means of the agreement they will be able to compete more forcefully in their respective territories against KFC, Subway, Pizza Hut, and Taco Bell, and thereby benefit consumers.
Legal if approved by the Florida Keys Chamber of Commerce and Better Business Bureau.
a.Illegal per se horizontal territorial division pursuant to the Sherman Act
b.Illegal per se vertical territorial division pursuant to the Sherman Act
c.Legal if the three fast-food chains can convince the court that by means of the agreement they will be able to compete more forcefully in their respective territories against KFC, Subway, Pizza Hut, and Taco Bell, and thereby benefit consumers.
d.Legal if approved by the Florida Keys Chamber of Commerce and Better Business Bureau.
Explanation / Answer
Illegal per se horizontal territorial division pursuant to the Sherman Act