Snowboards Inc. refuses to sell its products to Timber Winter Sports Stores, Inc., a retail snowboard dealership. This violates Section 2 of the Sherman Act if Snowboards has monopoly power and a. Timber has or is likely to acquire monopoly power. b. the refusal has an anticompetitive effect on the market. c. the refusal is unilateral. d. none of the choices.

Question

Gustavo Wiggins

Business

10 May, 16:56

Snowboards Inc. refuses to sell its products to Timber Winter Sports Stores, Inc., a retail snowboard dealership. This violates Section 2 of the Sherman Act if Snowboards has monopoly power and a. Timber has or is likely to acquire monopoly power. b. the refusal has an anticompetitive effect on the market. c. the refusal is unilateral. d. none of the choices.

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Answers (1)

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Bernard Cook · Answer 1

b. The refusal has an anti competitive effect on the market.

Explanation:

When a company that sells certain products fails to sell same to a retailer who deals in same products, such is said to have anti competitive effect on the market. The aim is to reduce competition in the market.

This type of refusal would always lead to price fixing, boycott. etc. When there is price fixing, it would lead to customers being unable to buy the product due to high price.

Products that are evenly distributed and not selective would increase competition in the market place such that customers would be able to purchase such product in any retail shop that sells the products.