Question 1

The Clayton Act prevents a corporation from acquiring another corporation if:

Accepted Answer

A)   the result is that it may substantially lessen competition
B)   consumers are not informed of the acquisition
C)   wholesalers who supply the competitors cannot continue to sell goods to separate buyers
D)   the corporations are in identical lines of commerce
E)   all of the other choicesF) None of the above
G) C) and E)

Question 2

The cases concerning monopolization indicate:

Accepted Answer

A)   a concern with protecting competitors
B)   a desire to restrict the size of firms
C)   protecting competition itself
D)   the per se rule generally applies
E)   none of the other choicesF) A) and C)
G) A) and B)

Question 3

A horizontal market division occurs when businesses on different levels of industry agree to share a geographic market or market territory.

Accepted Answer

A) True 
 B)False

Question 4

In U.S. Steel Corp. v. Fortner Enterprises, U.S. Steel loaned Fortner money to buy mobile homes from the company to put in his mobile home park, the Supreme Court held that it was:

Accepted Answer

A)   illegal for U.S. Steel to tie the sale of the homes to the financing
B)   an illegal boycott for U.S. Steel to refuse to lend the money once they sold the homes
C)   illegal for the homes to be sold with the financing since it created an exclusive deal
D)   not price discrimination under the Robinson-Patman Act to fix the home price together with the financing rate
E)   none of the other choicesF) All of the above
G) None of the above

Question 5

Fact Pattern 20-1
MicroManage is the fastest growing home-software producer in the country. In 2000, it sold 6% of all home software in the U.S., but in 2011, it sold 55% of all home software. A recent issue of Computer Universe said that MicroManage was "the most dominant and aggressive of all home-software developers." Home software is a small part of the entire software industry.
In 2011, MicroManage proposed a merger with Game Master, its main rival. Game Master was responsible for 10% of all home-software sales in 2010. MicroManage's president says that the combination of the firms will allow MicroManage to lower costs and pass the savings on to its customers.
The Department of Justice filed suit to stop this merger, claiming the combination would give monopoly power to the merged firm. Justice insists that consumers would lose in the end.
-Refer to Fact Pattern 20-1. If MicroManage were to ignore the Justice challenge and go ahead and merge with Game Master, what penalties could it face?

Accepted Answer

A)   a cease and desist order
B)   MicroManage could be enjoined from further operation
C)   MicroManage could be forced to pay treble damages
D)   MicroManage could be fined up to $1 million
E)   all of the other choicesF) B) and C)
G) A) and E)

Question 6

Vertical exclusionary practices do not include:

Accepted Answer

A)   boycotts
B)   tying arrangements
C)   price fixing by competitors
D)   exclusive dealing arrangements
E)   all of the other choices are vertical exclusionary practicesF) A) and B)
G) C) and E)

Question 7

Jennie has the right to sell Lovely cosmetics. According to her contract with Lovely, Jennie may only sell cosmetics in three counties in Delaware. No one else may sell Lovely cosmetics in this region. If another door-to-door cosmetics seller sued Lovely, alleging that this agreement with Jennie was illegal, what would they base their suit on?

Accepted Answer

A)   on an illegal territorial restraint
B)   on illegal price fixing
C)   on illegal discriminatory behavior
D)   on an illegal partition of services
E)   on an illegal monopolizationF) D) and E)
G) All of the above

Question 8

In FTC v. Proctor & Gamble, the Supreme Court blocked the merger of Clorox and Proctor & Gamble, even though the companies did not make the same products. The court based its decision on which legal theory?

Accepted Answer

A)   market share liability
B)   application of the per se rule
C)   market predation
D)   strict liability
E)   none of the other choicesF) A) and C)
G) All of the above

Question 9

Suppose Coca-Cola required anyone who wanted to distribute Coke products must to also purchase a new candy product that Coca-Cola manufactures. This practice would be:

Accepted Answer

A)   illegal per se as an exclusive dealing arrangement under the Clayton Act
B)   illegal per se as a tying arrangement under the Clayton Act
C)   legal as a method of product innovation allowed by the Clayton Act
D)   legal only because the candy requirement protected the company's sugar suppliers
E)   none of the other choicesF) A) and E)
G) D) and E)

Question 10

A firm's market share refers to:

Accepted Answer

A)   the number of products a firm produces
B)   the number of states a firm operates in
C)   the ability of the firm to profitably to maintain prices above competitive levels for a significant period of time
D)   the percentage of sales that a firm exports
E)   none of the other choices are correctF) C) and D)
G) A) and B)

Question 11

The Clayton Act holds illegal:

Accepted Answer

A)   "overly vigorous" methods of competition
B)   certain forms of price discrimination
C)   tying sales that create a monopoly
D)   certain forms of price discrimination and tying sales that create a monopoly
E)   certain forms of price discrimination and tying sales that create a monopoly and "overly vigorous" methods of competitionF) A) and D)
G) D) and E)

Question 12

When evaluating the relevant market in an antitrust case, both the product market and the geographic market may be considered.

Accepted Answer

A) True 
 B)False

Question 13

The Clayton Act was passed to:

Accepted Answer

A)   deal with the problem of state interference in a federal issue
B)   add restrictions beyond the Sherman Act
C)   show Congressional dislike of free trade
D)   deal with price fixing by the Standard Oil Trust
E)   try to limit dangerous fluctuations in the stock marketF) A) and B)
G) All of the above

Question 14

A collection of rival producers that come together by some form of agreement in an attempt to restrain trade by restricting output and raising prices is called in antitrust a:

Accepted Answer

A)   vertical merger
B)   boycott
C)   directorate
D)   confederation
E)   none of the other choicesF) B) and D)
G) B) and E)

Question 15

Illegal boycotts may involve manufacturers getting together to tell dealers what to do.

Accepted Answer

A) True 
 B)False

Question 16

Vertical price fixing:

Accepted Answer

A)   involves an agreement among all manufacturers of a product
B)   involves an agreement among manufacturers, wholesalers, and retailers
C)   attempts to control the price at which a product is sold to consumers
D)   involves an agreement among all manufacturers of a product and attempts to control the price at which a product is sold to consumers
E)   involves an agreement among manufacturers, wholesalers, and retailers and attempts to control the price at which a product is sold to consumersF) A) and E)
G) D) and E)

Question 17

The requirement that if one product or service is purchased then another product or service must also be purchased, even if not desired by the customer, is called:

Accepted Answer

A)   a tying arrangement
B)   a boycott
C)   a merger
D)   a cartel
E)   a discriminationF) All of the above
G) A) and B)

Question 18

A(n)  ____ occurs when firms competing at the same level of business reach an agreement to divide the market on geographic or other terms.

Accepted Answer

A)   vertical market division
B)   antitrust market division
C)   sideways market division
D)   real market division
E)   none of the other choices are correctF) All of the above
G) A) and C)

Question 19

Which of the following is a possible remedy to an antitrust suit brought by the government:

Accepted Answer

A)   restrain a company from certain conduct
B)   force a company to sell part of its assets
C)   force a company to let other use its patents
D)   all of the other specific choices are correct
E)   none of the other specific choices are correctF) A) and D)
G) B) and D)

Question 20

Fact Pattern 20-2
Vysion produces TVs it sells nationwide. Vysion contracted with Karol's Appliances to make it the exclusive distributor of Vysion TVs in the San Diego area. Karol's received a promise that Vysion would not sell its TVs to any other retailer within 20 miles of Karol's.
In its San Diego stores, Karol's has a unique pricing policy. A higher price is charged to customers wearing suits than to customers not wearing suits. Karol's salespeople give non-suit-wearing customers 10% discounts off of the list price, and refuse any discounts to suit-wearing customers.
Don's, a rival of Karol's, asked Vysion to allow it to sell its products in San Diego. Vysion refused, pointing to its contract with Karol's. Vysion's distribution policy differs in New York from what it is in California. In New York, Vysion allows every distributor who asks to sell Vysion TVs. However, Vysion requires that New York retailers sign contracts stating that they agree not to sell Vysion products below prices in a monthly "price list" sent by Vysion.
In contracts with its distributors nationwide, Vysion insists that sales of its TVs be tied to sales of its VCRs. No consumer is allowed to purchase a Vysion TV without also buying a Vysion VCR.
-Refer to Fact Pattern 20-2. If Don's were to sue Vysion because Vysion will not allow Don's to carry Vysion products, what would be the most likely outcome of the lawsuit?

Accepted Answer

A)   Don's would win because Vysion's contract with Karol's is an illegal horizontal restraint of trade
B)   Don's would lose because under Leegin Creative Leather, this is a pro-competitive arrangement
C)   Don's would win because under Leegin Creative Leather this violates the Clayton Act
D)   Don's would lose because Vysion's contract with Karol's is an illegal customer restriction
E)   Don's would lose because Vysion's contract with Karol's is per se illegalF) C) and E)
G) A) and D)

Exam 20: Antitrust Law

Correct Answer
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The Clayton Act holds illegal:

Correct Answer
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Suppose Coca-Cola required anyone who wanted to distribute Coke products must to also purchase a new candy product that Coca-Cola manufactures. This practice would be:

Correct Answer
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Vertical price fixing:

Correct Answer
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In U.S. Steel Corp. v. Fortner Enterprises, U.S. Steel loaned Fortner money to buy mobile homes from the company to put in his mobile home park, the Supreme Court held that it was:

Correct Answer
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A firm's market share refers to:

Correct Answer
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Correct Answer
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The Clayton Act prevents a corporation from acquiring another corporation if:

Correct Answer
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When evaluating the relevant market in an antitrust case, both the product market and the geographic market may be considered.

Correct Answer
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The Clayton Act was passed to:

Correct Answer
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Correct Answer
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In FTC v. Proctor & Gamble, the Supreme Court blocked the merger of Clorox and Proctor & Gamble, even though the companies did not make the same products. The court based its decision on which legal theory?

Correct Answer
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A(n) ____ occurs when firms competing at the same level of business reach an agreement to divide the market on geographic or other terms.

Correct Answer
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Illegal boycotts may involve manufacturers getting together to tell dealers what to do.

Correct Answer
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A horizontal market division occurs when businesses on different levels of industry agree to share a geographic market or market territory.

Correct Answer
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Vertical exclusionary practices do not include:

Correct Answer
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The requirement that if one product or service is purchased then another product or service must also be purchased, even if not desired by the customer, is called:

Correct Answer
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The cases concerning monopolization indicate:

Correct Answer
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Which of the following is a possible remedy to an antitrust suit brought by the government:

Correct Answer
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A collection of rival producers that come together by some form of agreement in an attempt to restrain trade by restricting output and raising prices is called in antitrust a:

Correct Answer
verified

Exam 20: Antitrust Law

Correct AnswerverifiedShow Answer

The Clayton Act holds illegal:

Correct AnswerverifiedShow Answer

Suppose Coca-Cola required anyone who wanted to distribute Coke products must to also purchase a new candy product that Coca-Cola manufactures. This practice would be:

Correct AnswerverifiedShow Answer

Vertical price fixing:

Correct AnswerverifiedShow Answer

In U.S. Steel Corp. v. Fortner Enterprises, U.S. Steel loaned Fortner money to buy mobile homes from the company to put in his mobile home park, the Supreme Court held that it was:

Correct AnswerverifiedShow Answer

A firm's market share refers to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The Clayton Act prevents a corporation from acquiring another corporation if:

Correct AnswerverifiedShow Answer

When evaluating the relevant market in an antitrust case, both the product market and the geographic market may be considered.

Correct AnswerverifiedShow Answer

The Clayton Act was passed to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In FTC v. Proctor & Gamble, the Supreme Court blocked the merger of Clorox and Proctor & Gamble, even though the companies did not make the same products. The court based its decision on which legal theory?

Correct AnswerverifiedShow Answer

A(n) ____ occurs when firms competing at the same level of business reach an agreement to divide the market on geographic or other terms.

Correct AnswerverifiedShow Answer

Illegal boycotts may involve manufacturers getting together to tell dealers what to do.

Correct AnswerverifiedShow Answer

A horizontal market division occurs when businesses on different levels of industry agree to share a geographic market or market territory.

Correct AnswerverifiedShow Answer

Vertical exclusionary practices do not include:

Correct AnswerverifiedShow Answer

The requirement that if one product or service is purchased then another product or service must also be purchased, even if not desired by the customer, is called:

Correct AnswerverifiedShow Answer

The cases concerning monopolization indicate:

Correct AnswerverifiedShow Answer

Which of the following is a possible remedy to an antitrust suit brought by the government:

Correct AnswerverifiedShow Answer

A collection of rival producers that come together by some form of agreement in an attempt to restrain trade by restricting output and raising prices is called in antitrust a:

Correct AnswerverifiedShow Answer

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