Exam 38: Antitrust

Gorhan Construction,Brighton Bros.,and Tirenn Construction agreed that on three upcoming projects,Gorhan would bid lowest on one,Brighton would submit the lowest bid on the second project,and Tirenn would submit the lowest bid on the third project.In this way,they would each be assured of work for the upcoming season.This behavior:

In the case of United States v.Waste Management,Inc.,the U.S.Court of Appeals had to consider whether a merger of two large trash removal services was illegal.The merger created a company that controlled nearly 50 percent of the Dallas,Texas regional market.The court ruled that:

Both per se and rule of reason violations of the Sherman Act are automatically illegal.

Gary,Louise,and Brian,who own competing gas stations in town,happen to see each other at a restaurant one morning and have breakfast together.While talking,they decide to set their gas prices at the same amount.They have committed an illegal act only if the agreed price is unfair to consumers.

Explain horizontal price-fixing and vertical minimum and maximum price-fixing.Discuss their status under antitrust laws.

John D.Rockefeller's oil business was the main reason which legislation was enacted?

Discuss when monopoly power is not a violation of Section 2 of the Sherman Act.

The Sherman Act was designed to prevent extreme concentrations of economic power.

What law prohibits mergers that are anti-competitive?

Both the Justice Department and the Federal Trade Commission enforce antitrust laws.

A vertical merger involves companies at different stages of the production process.

If a company has violated antitrust laws:

Horizontal cooperative strategies would include all EXCEPT:

Pat's Pen Co.manufacturers and sells an inexpensive ball-point pen.Salley's Stationery purchases the pens for $.25 each in quantities of 1,000.Salley's discovered that a national chain,a competitor of Salley's,buys the pen at $.20 for 1,000.If Salley's Stationery sues Pat's Pen Co.for price discrimination:

What is the Justice Department's current position relative to reciprocal dealing agreements?

This agreement violates the:

Cooperative strategies include all EXCEPT:

The only defense available to a defendant in a per se violation is that the violation never occurred.

Smalltown has two family-owned hardware stores that have been in business for years.Major Hardware decides that Smalltown would be a good place to build one of its superstores.Major opens,advertising unbelievably low prices; in fact,at below cost.Because Major owns stores nationally,it is able to keep prices extremely low until both of the family-owned stores have to go out of business because they cannot compete.After Major is the only hardware store in town,it raises its prices enough to make up for its former losses and to make some additional profit.Discuss this behavior in relation to antitrust law.

Ed was an independent owner of a chain of TV stores.He successfully got customers into his store by cutting his prices on widely advertised name-brand products in order to sell other products for which he received a bigger profit.When the manufacturers of three of the name-brand products discovered Ed's actions,they agreed secretly to stop selling him their TVs.The three manufacturers: