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Exam 42: Antitrust Law

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Question 31

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.

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

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Question 32

Multiple Choice

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Dairy Cream Corporation makes and sells ice cream. Dairy wants to merge with EZ Freeze Inc., its main competitor and a maker of ice cream and other frozen deserts. In a challenge to the deal on a charge of monopolization, the relevant product market includes ice cream and

A) no other products .
B) products that are related, such as cake.
C) products that have identical attributes, such as frozen yogurt.
D) products that must be kept cold, such as frozen fruit.

E) A) and B)
F) None of the above

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Question 33

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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?

Trail Bikes Inc. makes and distributes Trail-brand products to authorized dealers. To prevent price-cutting by dealers in direct competition, Trail imposes limits on where each dealer can sell the products. This is

Dredge Inc. is the major wholesale distributor of heavy equipment in the state of Texas. Its closest competitor is Excavator Company, another Texas firm. The two firms agree that Excavator will operate in east Texas and Dredge will operate in west Texas. This is

Section 1 of the Sherman Act allows a group boycott to be undertaken with the intention of preventing entry into a given market.

Section 1 of the Sherman Act permits rival firms to join in an agreement that consolidates their market power.

Antirust law is based on the desire to

Laws that regulate economic competition are referred to as

Plastic Company and Pliable Inc. agree to abide by the decisions of Polymer Corporation as to their respective levels of production, markets, and prices, effectively reducing competition and increasing profits. This is most likely

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

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

A seller can always reduce its prices to levels substantially below those charged by its competitors without violating antitrust law.

If the legitimate benefits outweigh the anticompetitive effects of an agreement between competitors, the agreement may be held lawful.

Fact Pattern 42-1 Pharma Corporation makes and sells QualMed, the most prescribed name-brand pain-relief medication. Renew Drugs Inc. has the potential to make a generic version of the same drug. Refer to Fact Pattern 42-1. Pharma pays Renew not to sell the generic product. This is

Micro Chip Corporation is charged with violating the Sherman Act through conduct subject to the rule of reason. When applying the rule of reason in this situation, a court will not consider

The Federal Trade Commission enforces the Sherman Act.

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

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

The Association of Organic Food Growers, which does not include all organic farmers and ranchers, refuses to deal with any parties who do not carry the products of its members. This group boycott is