Which of the following was a drawback of the Sherman Antitrust Act?

• A. It explicitly allowed price-fixing agreements among firms.
• B. It was often vaguely worded, making enforcement and interpretation difficult.
• C. It was only applicable to state governments, not private businesses.
• D. It immediately eliminated all monopolies in the United States.

Answer: (B)

Verified step by step guidance

1. Understand the historical context and purpose of the Sherman Antitrust Act, which was enacted to combat monopolies and promote competition in the U.S. economy.
2. Recognize that the Act aimed to prohibit business practices that restrained trade, such as monopolies and cartels, but did not explicitly allow price-fixing agreements; in fact, it sought to prevent them.
3. Note that one major drawback of the Sherman Antitrust Act was its vague wording, which made it difficult for courts and regulators to consistently enforce and interpret the law.
4. Identify that the Act applied to private businesses engaged in interstate commerce, not just state governments, so the statement about applicability is incorrect.
5. Understand that the Act did not immediately eliminate all monopolies; rather, it provided a legal framework that took time to be effectively used against monopolistic practices.