Two car manufacturers entered a joint venture to consolidate their efforts to create more fuel-efficient vehicles. The manufacturers agreed to split the expenses and profits from the joint venture equally. If an antitrust violation is alleged, identify and explain the standard used to evaluate the manufacturers' actions.
What will be an ideal response?
The rule of reason standard would be used to evaluate their actions. Their decision does not meet any of the per se violations. There was no horizontal price-fixing because the entity setting the price was the new joint venture and not the car manufacturers. Therefore, this case would be treated like Texaco.
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