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Exam 24: Antitrust Law and Promoting Competition

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Question 21

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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) B) and C)
F) B) and D)

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Question 22

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To deem an agreement a per se violation of antitrust law,a court must determine whether the agreement actually constitutes a restraint on trade.

A) True
B) False

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Question 23

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Under the Clayton Act,a business firm cannot merge with another unless the effect is to substantially lessen competition.

Any conspiracy that has a substantial effect on U.S.commerce is within the scope of the Sherman Act,unless it occurs outside the United States.

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

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

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

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

A price-fixing agreement or other anticompetitive agreement to control a portion of U.S.markets cannot be held to be a per se violation of the antitrust laws if the agreement involves a foreign firm.

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

The federal agencies that enforce the antitrust laws include

Power Inc.and QualGas Corporation refine and sell natural gas.To limit the supply on the market and thereby raise prices,Power and QualGas agree to buy "excess" supplies from dealers and "dispose" of it.This is

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

If the legitimate benefits outweigh the anticompetitive effects of a resale price maintenance agreement,the agreement may be held lawful.

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

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

Under the Clayton Act,a seller can condition the sale of a product on the buyer's promise not to deal in the goods of the seller's competitors.

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