You Own a Hair Salon in a College Town

Multiple Choice

You own a hair salon in a college town. Because there is competition for customers, the salons have been in a price war. You invite all salon owners to your home. They decide that the price war is hurting everyone and agree to charge standard rates for hairstyling. This arrangement is:

A) legal because it was a voluntary arrangement
B) legal because the price of styling hair is too low to be subject to the antitrust laws
C) legal because it does not hurt competition
D) legal under the rule of reason because the alternative, fewer salons, would mean less competition
E) illegal