Background: For many years, Bullock Corporation was a profitable company in a highly competitive U.S. domestic market for widgets. However, during the past decade it has suffered a tremendous decline in market share due to an invasion of widget sales from Korean and Chinese producers.

Question 1. Despite such efforts to regain market share, Bullock was largely unsuccessful in its attempts to compete with the Korean and Chinese companies. Accordingly, it carefully studied the practices of the foreign competitors to see if it could duplicate them. Each time one of the foreign companies lowered its price, Bullock lowered its price to the exact same level. Each time the foreign company introduced a new sales promotion, Bullock offered the same incentive. Discuss the legality of this new strategy under Section 1 of the Sherman Act.

Question 2. When Bullock's new efforts to compete failed to generate increased sales or market share, it ultimately met with several of its closest U.S. competitors. Together they devised shared marketing plans to offset the Korean and Chinese competition. The result of this cooperation was two-fold: (1) the U.S. companies began to regain their market share at the expense of the foreign competitors, and (2) the overall price of widgets to U.S. consumers declined while the quality of service accompanying those sales actually increased. Discuss the legality of this new strategy under Section 1 of the Sherman Act.