Question 1

Market power is the economic power to buy what you want in a given market.

Accepted Answer

A) True 
 B)False  False

Question 2

Bubbly Bottling Company is engaged in the soft-drink bottling and distribution industry in the states of New York and New Jersey.The firm currently has about 40 percent of the market for these products and related services.Carbonate Distribution Corporation competes with Bubbly in the same states.Carbonate has about 35 percent of the market.If Bubbly were to acquire the stock and assets of Carbonate,would Bubbly be in violation of any of the antitrust laws? If so,which one? Discuss fully.

Accepted Answer

Section 7 of the Clayton Act prohibits the type of action by Bubbly suggested in this question-a horizontal merger that would increase market concentration.Other factors include the overall concentration of the relevant market,that market's history of tending toward concentration,and whether the merger is apparently designed to establish market power or restrict competition.Based on the facts stated in the question,most of these factors are present.Thus,the major antitrust law being violated is Section 7 of the Clayton Act.Section 7 pro?hibits any person or business organization from acquiring the stock or assets in an?other business where the result would be a significantly increased market share and the effect would most likely be to substan?tially lessen competition.The removal of a competitor who controls 35 per?cent of the market (Carbonate)combined with the 40 percent held by the acquiring company (Bubbly)definitely could drive out the remaining small competitors and be a barrier to future entrants into this market.Either the U.S.Department of Justice or the Federal Trade Commission could file for di?vestiture of the resulting firm if these parties were to merge.

Question 3

The United Association of Video Game Designers,which does not include all video game makers,refuses to deal with any parties who do not carry the products of its members.This group boycott is

Accepted Answer

A) a situation that neither restrains trade or harms competition. 
B) a legal restraint of trade. 
C) a per se violation of antitrust law. 
D) subject to analysis under the rule of reason. 
A) a situation that neither restrains trade or harms competition. 
B) a legal restraint of trade. 
C) a per se violation of antitrust law. 
D) subject to analysis under the rule of reason. C

Question 4

Red's Sport Equipment Inc.and Sienna Athletic Company are the chief competitors in their market.They agree that Red's will operate only north of the Mason-Dixon line and Sienna will operate only south of the same line.Under antitrust law,this is most likely

Accepted Answer

A) a per se violation. 
B) a violation only if their competitors make similar deals. 
C) a violation only if their customers agree to honor the deal. 
D) not a violation. 
A) a per se violation. 
B) a violation only if their competitors make similar deals. 
C) a violation only if their customers agree to honor the deal. 
D) not a violation.

Question 5

Attempted monopolization is not a violation of antitrust law.

Accepted Answer

A) True 
 B)False

Question 6

A firm may have a legitimate reason for imposing a territorial or customer restriction.

Accepted Answer

A) True 
 B)False

Question 7

Resale price maintenance agreements are currently considered per se violations of antitrust law.

Accepted Answer

A) True 
 B)False

Question 8

A horizontal merger occurs when a company at one stage of production acquires a company at a higher or lower stage of production.

Accepted Answer

A) True 
 B)False

Question 9

Quotient Corporation and Precision Products,Inc. ,are the principal sup?pliers of their product in their market.They agree that Quotient will sell exclusively to retailers and Precision will sell exclusively to wholesalers.Under antitrust law,this is most likely

Accepted Answer

A) a per se violation. 
B) a violation only if their competitors make similar deals. 
C) a violation only if their customers agree to honor the deal. 
D) not a violation. 
A) a per se violation. 
B) a violation only if their competitors make similar deals. 
C) a violation only if their customers agree to honor the deal. 
D) not a violation.

Question 10

Press Now Corporation,a disk manufacturer,sells its product in certain quan?ti?ties to Quik 2U,a retailer,for $275 but charges Rite Here,a com?peti?tive re?tailer,$350.This price discrimination is legal

Accepted Answer

A) under any circumstances. 
B) unless its effect is to cause a competitor a loss of any business. 
C) unless its effect is to substantially lessen competition. 
D) unless there is no effect on a competitor. 
A) under any circumstances. 
B) unless its effect is to cause a competitor a loss of any business. 
C) unless its effect is to substantially lessen competition. 
D) unless there is no effect on a competitor.

Question 11

Repair Prepare Parts Company charges different buyers different prices for identi?cal goods.This is

Accepted Answer

A) market power. 
B) predatory pricing. 
C) price discrimination. 
D) price-fixing. 
A) market power. 
B) predatory pricing. 
C) price discrimination. 
D) price-fixing.

Question 12

The possession of monopoly power is only one element of the offense of monopolization.

Accepted Answer

A) True 
 B)False

Question 13

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.Cardio pays Emitate not to sell its product.This price-fixing agreement is most likely

Accepted Answer

A) a deal that neither restrains trade or harms competition. 
B) a legal restraint of trade. 
C) a per se violation of antitrust law. 
D) subject to analysis under the rule of reason. 
A) a deal that neither restrains trade or harms competition. 
B) a legal restraint of trade. 
C) a per se violation of antitrust law. 
D) subject to analysis under the rule of reason.

Question 14

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

Accepted Answer

A) market power. 
B) predatory pricing. 
C) price discrimination. 
D) price-fixing. 
A) market power. 
B) predatory pricing. 
C) price discrimination. 
D) price-fixing.

Question 15

Energy Services Corporation engages in trade practices that may violate antitrust law.The Federal Trade Commission has the power to act against anticompetitive behavior under

Accepted Answer

A) Section 1 of the Sherman Act. 
B) the Federal Trade Commission Act. 
C) no federal law. 
D) Section 2 of the Sherman Act. 
A) Section 1 of the Sherman Act. 
B) the Federal Trade Commission Act. 
C) no federal law. 
D) Section 2 of the Sherman Act.

Question 16

Gourmet Foods,Inc. ,requires all distribu?tors of its products to sell them at a specified minimum price.This is a violation of antitrust law

Accepted Answer

A) if the anticompetitive effects outweigh the competitive benefits. 
B) if the competitive benefits outweigh the anticompetitive effects. 
C) under any circumstances. 
D) under no circumstances. 
A) if the anticompetitive effects outweigh the competitive benefits. 
B) if the competitive benefits outweigh the anticompetitive effects. 
C) under any circumstances. 
D) under no circumstances.

Question 17

Restraints that have a significant impact on interstate commerce do not violate antitrust law.

Accepted Answer

A) True 
 B)False

Question 18

Only the Federal Trade Commission can prosecute violations of all of the antitrust laws.

Accepted Answer

A) True 
 B)False

Question 19

Listen Up! Corporation books and promotes concerts and other entertainment events,for which Listen Up! also sells tickets.In weighing a challenge to Listen Up!'s "monopolistic" ticket prices,a court looks at the relevant geographic market.This encompasses

Accepted Answer

A) only areas in which Listen Up! does not have monopoly power. 
B) only areas in which Listen Up! has monopoly power. 
C) the area in which Listen Up! and its competitors sell the tickets. 
D) the entire United States in all cases. 
A) only areas in which Listen Up! does not have monopoly power. 
B) only areas in which Listen Up! has monopoly power. 
C) the area in which Listen Up! and its competitors sell the tickets. 
D) the entire United States in all cases.

Question 20

Fresh Veggies,Inc. ,a wholesaler,refuses to sell its produce to Grocery Mart Stores,Inc. ,a re?tailer.Under antitrust law,this is

Accepted Answer

A) "an unfair or deceptive act or practice." 
B) a per se violation. 
C) not a violation. 
D) subject to analysis under the rule of reason. 
A) "an unfair or deceptive act or practice." 
B) a per se violation. 
C) not a violation. 
D) subject to analysis under the rule of reason.

Exam 47: A: Antitrust Law

Market power is the economic power to buy what you want in a given market.

The United Association of Video Game Designers,which does not include all video game makers,refuses to deal with any parties who do not carry the products of its members.This group boycott is

Red's Sport Equipment Inc.and Sienna Athletic Company are the chief competitors in their market.They agree that Red's will operate only north of the Mason-Dixon line and Sienna will operate only south of the same line.Under antitrust law,this is most likely

Attempted monopolization is not a violation of antitrust law.

A firm may have a legitimate reason for imposing a territorial or customer restriction.

Resale price maintenance agreements are currently considered per se violations of antitrust law.

A horizontal merger occurs when a company at one stage of production acquires a company at a higher or lower stage of production.

Quotient Corporation and Precision Products,Inc. ,are the principal sup?pliers of their product in their market.They agree that Quotient will sell exclusively to retailers and Precision will sell exclusively to wholesalers.Under antitrust law,this is most likely

Press Now Corporation,a disk manufacturer,sells its product in certain quan?ti?ties to Quik 2U,a retailer,for $275 but charges Rite Here,a com?peti?tive re?tailer,$350.This price discrimination is legal

Repair Prepare Parts Company charges different buyers different prices for identi?cal goods.This is

The possession of monopoly power is only one element of the offense of monopolization.

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.Cardio pays Emitate not to sell its product.This price-fixing agreement is most likely

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

Energy Services Corporation engages in trade practices that may violate antitrust law.The Federal Trade Commission has the power to act against anticompetitive behavior under

Gourmet Foods,Inc. ,requires all distribu?tors of its products to sell them at a specified minimum price.This is a violation of antitrust law

Restraints that have a significant impact on interstate commerce do not violate antitrust law.

Only the Federal Trade Commission can prosecute violations of all of the antitrust laws.

Listen Up! Corporation books and promotes concerts and other entertainment events,for which Listen Up! also sells tickets.In weighing a challenge to Listen Up!'s "monopolistic" ticket prices,a court looks at the relevant geographic market.This encompasses

Fresh Veggies,Inc. ,a wholesaler,refuses to sell its produce to Grocery Mart Stores,Inc. ,a re?tailer.Under antitrust law,this is

A: Introduction to Law and Legal Reasoning

B: Introduction to Law and Legal Reasoning

C: Introduction to Law and Legal Reasoning

D: Introduction to Law and Legal Reasoning

A: Courts and Alternative Dispute Resolution

B: Courts and Alternative Dispute Resolution

A: Court Procedures

B: Court Procedures

A: Constitutional Authority to Regulate Business

B: Constitutional Authority to Regulate Business

A: Ethics and Business Decision Making

B: Ethics and Business Decision Making

A: Intentional Torts and Privacy

B: Intentional Torts and Privacy

A: Negligence and Strict Liability

B: Negligence and Strict Liability

C: Negligence and Strict Liability

D: Negligence and Strict Liability

A: Intellectual Property and Internet Law

B: Intellectual Property and Internet Law

A: Criminal Law and Cyber Crimes

B: Criminal Law and Cyber Crime

A: Nature and Terminology

B: Nature and Terminology

C: Nature and Terminology

D: Nature and Terminology

A: Agreement in Traditional and E-Contracts

B: Agreement in Traditional and E-Contracts

A: Consideration

B: Consideration

A: Capacity and Legality

B: Capacity and Legality

A: Mistakes,fraud,and Voluntary Consent

B: Mistakes,fraud,and Voluntary Consent

A: The Statute of Frauds

B: The Statute of Frauds

A: Third Party Rights

B: Third Party Rights

A: Performance and Discharge

B: Performance and Discharge

A: Breach of Contract and Remedies

B: Breach of Contract and Remedies

A: The Formation of Sales and Lease Contracts

B: The Formation of Sales and Lease Contracts

C: The Formation of Sales and Lease Contracts

D: The Formation of Sales and Lease Contracts

A: Title,risk,and Insurable Interest

B: Title,risk,and Insurable Interest

A: Performance Breach of Sales Lease Contracts

B: Performance Breach of Sales Lease Contracts

A: Warranties and Product Liability

B: Warranties and Product Liability

A: International Law in a Global Economy

B: International Law in a Global Economy

A: The Function Creation of Negotiable Instruments

B: The Function Creation of Negotiable Instruments

C: The Function Creation of Negotiable Instruments

D: The Function Creation of Negotiable Instruments

A: Transferability and Holder in Due Course

B: Transferability and Holder in Due Course