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Exam 27: Antitrust Law

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Question 21

Multiple Choice

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Best View Corporation offers to sell LED screens to Computer & Video, Inc., only if the buyer also agrees to buy the seller's servicing of its products. This is

A) an exclusive-dealing contract.
B) a tying arrangement.
C) price discrimination.
D) business acumen.

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Question 22

Multiple Choice

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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

A) liable for failing to comply.
B) not liable because the firms are likely to continue to compete.
C) not liable because the firms' officers conduct the competitive activities.
D) not liable because the firms' shareholders can affect company policies.

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Question 23

Multiple Choice

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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

With respect to antitrust violations, the Federal Trade Commission does not enforce

With respect to anticompetitive behavior, the Federal Trade Commission Act prohibits

To reduce marketing costs and raise prices, competitors can divide up marketing territories or customers without violating antirust law.

A market in which there is a single seller or a very limited number of sellers is a monopoly.

Price-fixing agreements are considered violations of the Sherman Act because of their real and potential adverse effects on open and free competition.

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

Fish Purveyors Corporation and Gill Netters Inc. are the principal suppliers of crustaceans in their market. They agree that Fish Purveyors will sell exclusively to retailers and Gill Netters will sell exclusively to wholesalers. This is most likely

Dig Inc. is the major wholesale distributor of heavy equipment in six states. Dig's closest competitor is Excavator Company. The two firms agree that Dig will operate in four of the states and Excavator in the other two. This is

Antirust legislation is based on society's desire to

Under what circumstances would Quality Market, a small store in Rustic, an isolated town, be considered a monopoly? If Quality Market is a monopoly, is it in violation of antitrust law?

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

The power to control the market price of a product is 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

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.

Only the Federal Trade Commission can enforce the Clayton Act.

Ranch Supplies Company believes that its chief competitor Stock & Equipment Inc. engages in anticompetitive behavior in an attempt to drive Ranch Supplies out of the market. Under the Clayton Act, Ranch Supplies can sue Stock & Equipment for a violation of