What is price fixing?

• A. Federal law prohibits manufacturers from selling to the end user at a set price.
• B. An agreement between two or more businesses to set the same price.
• C. A discount applied based on volume purchases.
• D. The price charged by retailers at the point of sale.

Answer: (B)

Price fixing is when competitors secretly agree to set the same price for their products or services, removing price-based competition and keeping prices artificially stable. That’s why the best description is an agreement between two or more businesses to set the same price—it directly describes the collusive action that price fixing entails and why it’s illegal in many places because it harms consumers and stifles competition.

The other ideas describe different pricing concepts: a rule about selling to end users at a fixed price isn’t what price fixing refers to, volume-based discounts are common incentives for larger purchases, and the price at the point of sale is simply the actual selling price, not an agreement among competitors to fix it.