Exam 32: Promoting Competition

Big U.S. Oil Company joins with a foreign cartel to control the price of oil. If the cartel has a substantial effect on U.S. commerce

Fact Pattern 32-1 Cardio, Inc., makes and sells Drawdown, the most prescribed name-brand heart medication. Emitate Corporation has the potential to make a generic version of the same drug. -Refer to Fact Pattern 32-1. Cardio pays Emitate not to sell its product. This is

An agreement that is deemed a per se violation will be examined by a court to determine whether the agreement's benefits outweigh its anticompetitive effects.

The Sherman Act, the Clayton Act and the Federal Trade Commission Act are all examples of legislation designed to curb anticompetitive business practices.

Cooperative research by small-business firms is exempt from antitrust law.

A price-fixing agreement that is reasonable does not violate antitrust law.

Spa Selectiva Company makes and sells beauty salon supplies. By selling its product at prices substantially below the normal cost of production, Spa Selectiva hopes to drive its competitors from the market. This is

A court deems an agreement between Silver Saddles Saddlery and Time Tested Tack, Inc. to be a per se violation of the Sherman Act. The court is

Congress enacts a statute to outlaw a specific type of anticompetitive business agreement. Like other laws that regulate economic competition, this law is referred to as

Labor unions can organize and bargain without violating antitrust law.

The primary measure of monopoly power is a competitor's assessment of the acts of a firm under review.

A unilateral refusal to deal can violate antitrust laws if the refusal

Charging different prices to different buyers for identical goods is price discrimination.

Insurance companies are exempt from antitrust laws whenever state regulation exists.

Resale price maintenance agreements are subject to analysis under the rule of reason.

A single seller acting unilaterally is free to deal, or not to deal, with anyone it chooses.

Fresh Vegetables, Inc., a wholesaler, refuses to sell its produce to Good Mart Stores, Inc., a retailer. This is

Java Bean Company imports coffee beans and sells them under two-year contracts to Mellow Roast, Inc., and other coffeemakers. The contracts require that during the two-year term a coffeemaker not buy beans from Java Bean's competitors. The contracts do not limit the coffeemakers' purchase of tea or other beverage ingredients from other suppliers, however. In the second year of the contract, Mellow Roast protests that this arrangement violates antitrust law. Is Mellow Roast correct? If not, why not? If so, under which antitrust statute, or statutes, could these contracts be held illegal?

Antitrust legislation was created because of the belief that competition leads to lower prices.

Edgy Engine Components, Inc., a maker of vehicle parts, refuses to sell to Fidgety Fix-It, Inc., a national vehicle service firm. Edgy Engine convinces Greasy Motor Parts Company, a competitor, to do the same. This is