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Exam 24: Antitrust Law and Promoting Competition

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Question 1

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 its purpose is to create a monopoly.

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

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Question 2

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Mountain Crest Inc.makes and distributes its branded products to authorized dealers.To prevent price-cutting by dealers in direct competition,the firm imposes limits on where each dealer can sell the products.This is

A) a territorial restriction.
B) a trade association.
C) smart marketing.
D) a price-fixing agreement.

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

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Question 3

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Predatory pricing is not an antitrust violation because the tactic can eliminate a firm's competitors,enabling it to increase prices and earn higher profits to benefit its owners and employees.

Blu-ray producers cannot jointly lobby Congress to change the copyright laws without being held liable for attempting to restrain trade.

Pump Makers Inc.makes pumps for fire trucks and conditions shipments of its products to Quality Motors Corporation-a maker of fire trucks-on Quality's agreement to buy additional pumps only from Pump Makers.This is

Any agreement among competitors to artificially fix prices or restrict output is a per se violation of Section 1 of the Sherman Act.

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

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

Consumers benefit when producers work to develop better products that can be sold at lower prices to beat the competition.

Bio Med Corporation makes and sells Curative,the most prescribed name-brand pain-relief medication.Drugs Inc.has the potential to make a generic version of the same drug.Bio Med agrees to pay Drugs not to make or sell the generic.This agreement is most likely

Because a single seller is free to deal with whomever it wishes,the seller's unilateral refusal to deal cannot violate Section 2 of the Sherman Act.

Expressly exempt from antitrust laws because it is not interstate commerce,according to the United Supreme Court,is

Say It Inc.and Text Talk Inc.are social media companies.They compete for employees,users,and advertisers.The two firms work together on security threats,however.With respect to antitrust law,this cooperation is most likely

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

Establishing the relevant product market is a key issue in monopolization cases because the way a market is defined can determine whether a firm has monopoly power.

Every agreement concerned with trade,and every regulation of trade,restrains.The test of legality under the antitrust laws,according to the rule of reason,is whether the restraint

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

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

Antirust legislation is based on society's desire to

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