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Exam 38: Antitrust Law and Promoting Competition

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Question 31

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Establishing the relevant product market is a key issue in monopolization cases because the way a market is defined can determine whether a firm has monopoly power.

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Question 32

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Any agreement among competitors to artificially fix prices or restrict output is a per se violation of Section 1 of the Sherman Act.

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Question 33

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Every agreement concerned with trade, and every regulation of trade, restrains. The test of legality under the antitrust laws, according to the rule of reason, is whether the restraint

Mountain Crest Inc. makes and distributes its branded products to authorized dealers. To prevent price-cutting by dealers in direct competition, the firm imposes limits on where each dealer can sell the products. This is

Pump Makers Inc. makes pumps for fire trucks and conditions shipments of its products to Quality Motors Corporation-a maker of fire trucks-on Quality's agreement to buy additional pumps only from Pump Makers. This is

Fertile Acres Inc., Growers Farm Co-op, and Harvest Orchards agree to exchange information, conduct an advertising campaign, and set certain regulatory standards to govern their operations. This association is

The power to control the market price of a product is market power.

Only the U.S. Department of Justice can prosecute violations of the Sherman Act.

A firm may be deemed a monopolist, even though it is not the only seller in a market, because what matters is size in relation to the market.

Under a contract, Oil Shale Corporation forbids Petro Inc., a wholesale buyer of Oil Shale's products, to purchase products from the seller's competitors. This is prohibited

Online Media Inc. bundles its products so that consumers are forced to pay for access to some sites that they do not want in order to obtain access to sites that they do want. A court will likely rule that the bundling does not violate the rule of reason if it

Edibles Inc. and Food Stuff Corporation are competitors. Each firm has capital, surplus, and undivided profits in excess of $40 million and competitive sales of more than $5 million. Gina and Hal serve as directors on both firms' boards. Under the Clayton Act's restriction concerning interlocking directorates, Gina and Hal are

Blu-ray producers cannot jointly lobby Congress to change the copyright laws without being held liable for attempting to restrain trade.

Snowboards Inc. refuses to sell its products to Timber Winter Sports Stores, Inc., a retail snowboard dealership. This violates Section 2 of the Sherman Act if Snowboards has monopoly power and

To drive its competitors out of a certain geographic segment of its market, Drones, Inc., sets the prices of its products below cost for the buyers in that area. This is

Proving an antitrust violation requires showing a misuse of market power.

Components Inc., a maker of vehicle parts, refuses to sell to DIY Repair Inc., a national vehicle service firm. The maker convinces Engine Parts Company, a competitor, to do the same. This is

Because commerce operates more efficiently when competitors cooperate, Section 1 of the Sherman Act permits rivals to consolidate market power.

Any contract, combination in the form of a trust, or conspiracy to restrain trade and commerce can be declared illegal under the antitrust laws.

Consumers benefit when producers work to develop better products that can be sold at lower prices to beat the competition.