Which of the following is NOT considered a violation of the Sherman Antitrust Laws?

• A. Dividing markets among competing firms
• B. Engaging in bid rigging with other firms
• C. Colluding with competitors to fix prices
• D. A firm unilaterally setting its own prices

Answer: (D)

Verified step by step guidance

1. Understand the Sherman Antitrust Laws: These laws are designed to prohibit business activities that reduce competition in the marketplace, such as collusion, price fixing, and market division among competitors.
2. Identify actions that involve agreements or cooperation between firms, such as dividing markets, bid rigging, and colluding to fix prices. These are clear violations because they restrict competition through coordinated behavior.
3. Recognize that a firm unilaterally setting its own prices means the firm is acting independently without any agreement or collusion with other firms.
4. Recall that unilateral pricing decisions, even if they lead to high prices, are generally not considered violations of the Sherman Antitrust Laws unless they involve monopolistic practices or abuse of market power.
5. Conclude that among the options, the action that is NOT a violation is a firm unilaterally setting its own prices, because it does not involve illegal cooperation or agreements with competitors.