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In A Fix

You can fix your car. You can fix your cat. But you can't fix your prices.

This story appears in the May 2000 issue of Entrepreneur. Subscribe »

The frustrating part of setting prices for goods and services is figuring out what competitors are going to charge. Will your price be so low that you attract customers but can't make a decent profit? Will you be the only place in town charging so much for the item? How can you find out what your competitors are charging so you can adjust your prices slightly higher or lower?

The traditional method is to read your competitors' sale ads or send someone over to scope out their prices. Wonder why you can't save the hassle and just pick up the phone to chat with your competitors about it? Because that would be a direct violation of the Sherman Antitrust Act, a federal law adopted in 1890. The Sherman Act was designed to encourage healthy competition and keep any one company from monopolizing a whole industry. It's the law under which the Justice Department is pursuing Microsoft, but it can apply to even the smallest store. The law forbids competing companies of any size from entering "contracts, combinations or conspiracies" in restraint of trade.

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