Company A and Company B both manufacture a chemical used in a specific industry. In recent years, they have seen more companies entering their market, although together they still control 75 percent. The two companies make a secret deal to lower their prices to the same level at the same time.

When competing companies secretly agree to set their prices at the same level, they are engaging in price-fixing. Price-fixing is generally illegal because it interferes with competition and can harm consumers, even if the agreed prices are lower. The fact that the companies together control 75 percent of the market does not make the deal acceptable, and neither company needs to be a monopoly for the agreement to be illegal. The correct choice is “It would view the deal as an example of illegal price-fixing.”

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