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Exam 24: Antitrust Law and Promoting Competition

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Question 31

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Four grocery stores account for 80 percent of the retail food sales in Metro City.Two of the stores want to merge.In determining whether the merger violates the Clayton Act,the most crucial factor is

A) the market shares of the firms in their market.
B) the market value of the firms' shares in the stock market.
C) the comparative value of each store in a market for their sale.
D) the total value of the market in relation to the stock for sale in the stores.

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

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Question 32

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

A) the Federal Trade Commission Act.
B) the Clayton Act.
C) the Sherman Act.
D) any of the federal antitrust laws.

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

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Question 33

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

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

Only the Federal Trade Commission can enforce the Clayton Act.

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

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

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

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

Cosmétique Inc.makes and sells cosmetics and related products.By selling its goods at prices substantially below the normal cost of production,the firm hopes to drive its competitors from the market.This is

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

The legality of a tying arrangement depends in part on the agreement's likely effect on competition in the relevant markets.

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 antitrust law.

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

Precision Parts Corporation and Aligned Gears,Inc.are competitors selling certain machine parts that are otherwise generally unattainable in their geographic market.This market includes the states of Minnesota,North Dakota,and South Dakota.Precision Parts and Aligned Gears agree that Precision Parts will no longer sell in Minnesota and that Aligned Gears will no longer sell in North and South Dakota.Have Precision Parts and Aligned Gears violated any antitrust law? If so,which one? Explain.If they had divided their market by type of customer rather than geographic area,would the result be the same? Why or why not?

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.

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

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