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Exam 43: Antitrust Law

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Question 31

Multiple Choice

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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) under any circumstances.
B) if its effect is to stabilize the relevant market.
C) if its effect is to substantially lessen competition.
D) if tis purpose is to create a monopoly.

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

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Question 32

Multiple Choice

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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

A) a violation because it is "objectively baseless."
B) a violation because funds will be spent for an anticompetitive purpose.
C) a violation because it involves a conspiracy to affect market power.
D) exempt from antitrust enforcement.

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

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Question 33

Multiple Choice

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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

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

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

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

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

Because market power arises from access to consumer data, collecting such information is an antitrust violation.

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

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

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

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.

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.

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

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

Only the U.S. Department of Justice can prosecute violations of the Sherman Act.

Any contract, combination in the form of a trust, or conspiracy to restrain trade and commerce can be declared illegal under the antitrust laws.

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.

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