Question: Ethics Emphasis
Automobile sales were down in a certain city because of economic problems. The owner of one of the leading car dealerships set up a meeting with the owners of all the other car dealerships to see what could be done about the problem. They decided to act as a group to promote the sales of cars by agreeing to set all car prices at a uniform level of 5 percent below the sticker price and advertised this in the local papers. Complaints were made that this was illegal price fixing and restraint of trade.
1. Assuming that their action did not violate any laws, was this an ethical practice?
2. What is wrong with businesses trying to promote sales and help out potential car buyers using this type of sales pitch?
3. Would your answer be different if the dealerships had only decided to cooperate in marketing but had not set a price agreement?
4. How far should government go to restrict trade when the public might benefit from certain actions that might be considered restraints of trade?
5. How do you feel about the need for government restrictions on monopoly power that results from great efficiencies and quality merchandise produced by a business?