12
Decide the legality of the company's decision or action in the following situation:
Vericorp wants to increase its profitability. It rearranges its distribution services so that it can serve customers in certain areas better, while leaving other areas where competitors
are stronger unattended. The company makes no agreement with a competitor in doing so. Which of the following is true of this action?
This may be illegal under the rule of reason.
This is legal.
This is illegal per se.

Question

26-05-2024
Law

Answered

12
Decide the legality of the company's decision or action in the following situation:
Vericorp wants to increase its profitability. It rearranges its distribution services so that it can serve customers in certain areas better, while leaving other areas where competitors
are stronger unattended. The company makes no agreement with a competitor in doing so. Which of the following is true of this action?
This may be illegal under the rule of reason.
This is legal.
This is illegal per se.

Answer :

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Final answer:

The company's decision to rearrange distribution services to increase profitability is legal under the rule of reason, focusing on practices that may lessen competition.

Explanation:

This action is legal under the pricing guidelines that focus on practices that may lessen competition being interpreted under the rule of reason. The company's decision to rearrange distribution services to increase profitability without entering into agreements with competitors is not inherently illegal but would be assessed based on its impact on competition and market concentration.

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