Question

2) Allen is the CEO of a large chemical company. At a recent trade association meeting,...


2) Allen is the CEO of a large chemical company. At a recent trade association meeting, he has privately asked the CEOs of two other large chemical companies to agree to raise their prices so that they could increase profits. This is
a) a violation of Section 1 of the Sherman Act
b) bad corporate governance
c) legal behavior that is often frowned upon by the media.   
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Answer #1

In the given case, the CEO of the large chemical company is trying to collude with two other large chemical companies to price fixing that would be beneficial to them.

Collusion to fix price is considered as a restraint of trade and is considered a violation of the Section 1 of the Sherman Act.

So,

This act of the CEO is a violation of Section 1 of the Sherman Act.

Hence, the correct answer is the option (a).

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