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Price fixing by Apple?
- Thread starter mgguy
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Gas Stations
This might help.
There are two gas stations located on on opposite corners at the same intersection in a small town. Both currently charge $2.50 for a gallon of gas.
Situation 1: Manager A and Manager B get together one day at the golf course and say, "hey - let's agree to put the price at $2.75. If we both do it, people will pay it, because we're the only places to buy gas in town."
Situation 2: Manager A and Manager B both see their profit margins shrinking as the wholesale price edges up. Neither wants to be the first to up the price of gas, since that will drive all customers to the competitor (whose price can be seen at the same time at the intersection). Finally, Manager A gives in and raises the price to $2.75. Manager B, relieved, raises the price to match.
In both situations, the result is the same - gas ends up being $2.75 at both stations.
However, the only situation that fits the legal definition of "price fixing" is Situation 1, as it was a collaboration between competitors to artificially inflate a price.
Personally, I choose to call shells, spirals, and every other shape of pasta "spaghetti." It's just easier to call it all spaghetti, and the result is pretty much the same once it's shoved in your mouth. BUT, I would never go to a forum and argue that mosticcoli (sp?) is spaghetti, as I know that "spaghetti" is a term with a specific definition, and mosticcoli (sp?) doesn't fit that definition.
This might help.
There are two gas stations located on on opposite corners at the same intersection in a small town. Both currently charge $2.50 for a gallon of gas.
Situation 1: Manager A and Manager B get together one day at the golf course and say, "hey - let's agree to put the price at $2.75. If we both do it, people will pay it, because we're the only places to buy gas in town."
Situation 2: Manager A and Manager B both see their profit margins shrinking as the wholesale price edges up. Neither wants to be the first to up the price of gas, since that will drive all customers to the competitor (whose price can be seen at the same time at the intersection). Finally, Manager A gives in and raises the price to $2.75. Manager B, relieved, raises the price to match.
In both situations, the result is the same - gas ends up being $2.75 at both stations.
However, the only situation that fits the legal definition of "price fixing" is Situation 1, as it was a collaboration between competitors to artificially inflate a price.
Personally, I choose to call shells, spirals, and every other shape of pasta "spaghetti." It's just easier to call it all spaghetti, and the result is pretty much the same once it's shoved in your mouth. BUT, I would never go to a forum and argue that mosticcoli (sp?) is spaghetti, as I know that "spaghetti" is a term with a specific definition, and mosticcoli (sp?) doesn't fit that definition.
Actually, your situation 1 is an example of collusion, which is only one kind of price-fixing. Under current U.S. law, if a manufacturer sets the price at which a retailer must sell their products, then this is illegal price-fixing too.
Ok
Thanks for keeping me honest, bud. Still hope the example helps our new friend a little.
Thanks for keeping me honest, bud. Still hope the example helps our new friend a little.
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