What legal rule do you think the court should have

Reference no: EM133425887

Question: Suppose that Cole Coffee and Phils coffee which sell coffee across the street from each other on College Avenue in Rockridge agree to fix the price of coffee at $3.50 per cup for small and $4.50 for large. There are many other coffee shops on College avenue and scores of coffee shops in Rockridge and Elmwood, two adjacent neighborhoods on College Avenue near the Berkeley- Oakland border.

A. Phils and Cole Coffee argue that they don't have the power to fix prices as they control a small share of coffee sold in Rockridge or Elmwood, do not have the power to affect market prices or quantities together or individually, and would have charged these prices without the agreement. Does this price-fixing agreement violate the Sherman Act without the plaintiff proving more? (Give support for your answer from a couple of cases read in class)

B. Ignoring precedent, what legal rule do you think the court should have for a case like this one? (Give economic, and perhaps, other policy arguments on both sides of the question and explain how you come down)

Reference no: EM133425887

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