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Exam 38: Antitrust Law and Promoting Competition

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Question 1

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Baby Goods Inc. buys Child Shops Inc. in an attempt to gain monopoly power. Remedies that a court might impose in a suit against Baby Goods for a violation of the antitrust laws include

A) divesting itself of the control or ownership of Child Shops.
B) funding new entries to the relevant market.
C) all of the choices.
D) using its market power to encourage increased competition.

E) B) and C)
F) A) and D)

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Question 2

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When applying the rule of reason to an activity that allegedly violates the antitrust laws, a court will not consider

A) the purpose of the agreement.
B) the parties' market ability to implement the agreement.
C) whether the agreement is a per se violation.
D) the potential effect of the agreement on competition.

E) A) and D)
F) All of the above

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Question 3

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Antitrust legislation is based on a desire to limit economic competition.

Every threat of monopolization is condemned as a violation of antitrust law even if the alleged offender does not possess some degree of market power.

An antitrust action is brought against Carrier Freight Company, alleging that a certain act constitutes the offense of attempted monopolization. To qualify, the act must

The Medical Device Makers Association does not include all manufacturers of medical and surgical instruments. The association refuses to deal with any parties who do not carry the products of its members. This is

The federal agencies that enforce the antitrust laws include

The chief executive officers of the major U.S. steel makers would most likely be prosecuted under the antitrust laws if they

Even if a firm possesses monopoly power and engaged in anticompetitive conduct, it cannot be inferred that the firm acted with the intent to monopolize.

Road Tires Inc. conditions the sale of its products to Service Stores on the buyer's agreement to buy Road's tire-repair kits. Under the Clayton Act, this deal is

Oil Industries Inc. and Petro Corporation are competing refineries situated on the Gulf coast. The two firms cooperate to obtain federal funds to build a levee that could protect their facilities from rising sea levels. With respect to antitrust law, this effort is

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

American Oil Company joins a cartel that includes foreign participants to set the price of oil. The cartel has a substantial effect on U.S. commerce. With respect to the foreign participants, under U.S. antitrust laws, this is most likely

Say It Inc. and Text Talk Inc. are social media companies. They compete for employees, users, and advertisers. The two firms work together on security threats, however. With respect to antitrust law, this cooperation is most likely

A business, but not an individual person, can be deemed liable for monopolizing or attempting to monopolize trade or commerce in violation of the antitrust laws.

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

Section 2 of the Sherman Act essentially condemns the act of monopolizing, not the possession of monopoly power.

Any agreement that results in enhanced market power violates the antitrust laws.

Restraints of trade are laws that regulate economic competition.

Requiring users of a social media site to agree to certain terms and conditions to use the site is most likely an antitrust violation.