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Week 6 Price Fixing 1 and 2 - Predatory pricing refers to a...

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Section2 of the Sherman Act prohibits the acts of monopolization. In order to be considered in violation of this section of the Sherman Act, there must be proof that market power exists in a relevant market and that the power was abused intentionally or willfully. Predatory pricing is an intentional act by a company to monopolize their market. This type of price control is what proves they Continental had market power. Therefore, Continental‘s actions were illegal according to the Sherman Act.
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Unformatted text preview: Predatory pricing refers to a monopolistic approach by the pricing of a product below the actual cost. Because Continental’s predatory pricing is a monopolistic behavior is per se illegal. Per se illegal refers to behaviors among and between competitors. These behaviors and activities are taken very seriously be federal law according to our text. The courts do not investigate what the competitor’s behavior, however if their behavior is simply illegal, they are found per se illegal....
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