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BLAW 300 chapter 23
Terms in this set (33)
congress enacts a statute to outlaw a specific type of anticompetitive business agreement. like other laws that regulate economic competition, this law is referred to as
an antitrust law
North Mining Company and South Excavation Company agree to abide by the decisions of East Coast Financial Corporation as to their respective levels of production, markets, and prices, effectively reducing competition and increasing profits. This is most likely
an illegal restraint on trade
to fall under the Sherman act, an activity must
substantially affect interstate commerce
Thermo Gas, Inc., and Uno Oil Corporation refine and sell gasoline and other petroleum products. To limit the supply of gas on the market and thereby raise prices, Thermo Gas and Uno Oil agree to buy "excess" supplies from dealers and "dispose" of it. This is
a per se violation of the Sherman act
when applying the rule of reason to determine whether an agreement violates section 1 of the Sherman act, a court will not consider
the effect of the agreement on international trade
a court deems an agreement between silver saddles saddlery and time tested tack, inc., to be a per se violation of the Sherman act. the court is
prevented from determining whether the agreements benefits outweigh its anticompetitive effects
Gulf Air, Inc., is the major wholesale distributor of software in the state of Florida. Its closest competitor is Fluid Systems Company, another Florida firm. The two firms agree that Gulf Air will operate in south Florida and Fluid Systems will operate in north Florida. This is
a market division
Edgy Engine Components, Inc., a maker of vehicle parts, refuses to sell to Fidgety Fix-It, Inc., a national vehicle service firm. Edgy Engine convinces Greasy Motor Parts Company, a competitor, to do the same. This is
a group boycott
Some agreements are so blatantly and substantially anticompetitive that they are deemed illegal per se under Section 1 of the Sherman Act. Which of the following is not a per se violation?
a. A price-fixing agreement
b. A group boycott
c. A trade association
d. A market division
a trade association
Lightning Cycles, Inc., makes Lightning-brand motorcycles and accessories, which are distributed to authorized dealers, including Macho Motors, Inc. Macho operates dealerships in several locations. Lightning imposes restrictions on Macho to limit the areas in which they sell the bikes and insulate other dealers from direct competition. This is
a. a territorial restriction.
b. a resale price maintenance agreement.
c. a refusal to deal.
d. a price-fixing agreement.
a territorial restriction
Organic Cheeses, Inc., Fine & Fresh Foods Company, and Healthy Whole Foods, Inc. organize together to exchange information and share advertising. This is an example of a
a trade association
may be legal if it is sufficiently beneficial to both the association and the public
Spa Selectiva Company makes and sells beauty salon supplies. By selling its product at prices substantially below the normal cost of production, Spa Selectiva hopes to drive its competitors from the market. This is
Gourmet Foods, Inc., requires all distributors of its products to sell them at a specified minimum price. Under the Sherman Act, this is a violation
if the anticompetitive effects outweigh the competitive benefits
Marvin starts Marvin's bike company in Wheatland, South Dakota. there is one other bike store in Wheatland. through good business management, Marvin's bike company obtains a great deal of market power in Wheatland. this acquisition of monopoly power is
not an antirust violation
Imperio Caffeine Corporation makes and sells coffee under a variety of brand names. Imperio wants to merge with Java Company, its main competitor. In weighing a challenge to the deal, a court looks at the relevant product market. This most likely includes coffee and
a. no other products.
b. products that are not identical but are related, such as spin-offs.
c. products that are sometimes substituted for coffee.
d. products with identical attributes only.
products that are sometimes substituted for coffee
A suit is filed against Adroit Drilling Tools Corporation, alleging that the firm committed the offense of monopolization. To determine whether Adroit has monopoly power requires looking at
the relevant market
Listen Up! Corporation books and promotes concerts and other entertainment events, for which Listen Up! also sells tickets. In weighing a challenge to Listen Up!'s "monopolistic" ticket prices, a court looks at the relevant geographic market. This encompasses
a. only areas in which Listen Up! does not have monopoly power.
b. only areas in which Listen Up! has monopoly power.
c. the area in which Listen Up! and its competitors sell, and their customers buy, the tickets.
d. the entire United States in all cases.
the area in which Listen Up! and its competitors sell, and their customers buy, the tickets
A suit is filed against Dormroom Furniture Unlimited, Inc., alleging that the firm has committed the offense of monopolization. To determine whether Dormroom has committed this offense, the court will consider the extent of Dormroom's market power and
how dorm room ACQUIRED its power
Master Manufacturing Corporation has exclusive control over the market for its product. Under the Sherman Act, this is
a violation if it acquired this power through "anticompetitive means."
to acquire monopoly power in its market, Perfect Plastics, Inc., sets its prices lower than its competitors. under the Sherman act, this is
a violation if it thereby acquires monopoly power
Rally Speedboat Corporation refuses to sell its products to Super Weekends, Inc., a recreational water products dealership. This is
a. an exclusive-dealing contract.
b. a horizontal market division.
c. attempted monopolization.
d. a unilateral refusal to deal.
a unilateral refusal to deal
An antitrust action is brought against Tri-State Transport Company, alleging the offense of attempted monopolization. To be guilty of this offense, Tri-State's attempt must have
a dangerous PROBABILITY of success
fresh vegetables, inc., a wholesaler, refuses to sell its produce to Good Mart Stores, Inc., a retailer. This is
subject to analysis under the rule of reason
a unilateral refusal to deal can violate antitrust laws if the refusal
is likely to have an anticompetitive effect on a particular market
precious metal corporation, a raw material vendor, sells its commodities in certain quantities to Quarry Refining Company for a certain price but charges Rich Assets, Inc., a Quarry competitor, a higher price. This is most likely a violation of
the Clayton act
HVAC Parts Company charges different buyers different prices for identical goods. HVAC's prices are subject to evaluation under
the Clayton act
To drive its competitors out of a certain geographic segment of its market, Fryin' Potatoes, Inc., sets the prices of its products below cost for the buyers in that area. This is
City Manufacturing Corporation conditions shipments of its products to Exurb Stores, Inc., on Exurb's agreement not to buy products from Regional Works Company, City's competitor. This is
an exclusive-dealing contract
Luminescent Silicon Corporation, which controls 40 percent of the com¬puter-chip mar¬ket in the United States, merges with Micro Processors, Inc., which controls 15 per¬cent of the same market. This merger is a violation
a. only if the result more clearly concentrates the market.
b. only if the result makes it more difficult for potential competitors to enter the market.
c. if the result more clearly concentrates the market and makes it more difficult for potential competitors to enter the market.
d. under no circumstances.
if the result more clearly concentrate the market AND makes it more difficult for potential competitors to enter the market
Global Services Corporation engages in trade practices that may violate antitrust law. The Federal Trade Commission has the power to act against unfair trade practices under
a. the Clayton Act.
b. the Federal Trade Commission Act.
c. the Sherman Act.
d. no law.
the federal trade commission act
Mango Corporation believes that Melon Corporation engages in anticom-peti¬tive behavior in an attempt to drive Mango and its other competitors out of the market. Antitrust laws can be enforced against Melon by
a. Mango and its competitors only.
b. Mango, its competitors, and the Federal Trade Commission only.
c. Mango, its competitors, the Federal Trade Commission, and the U.S. Department of Justice.
d. the Federal Trade Commission and U.S. Department of Justice only.
mango, its competitors, the federal trade commission, and the US department of justice
Big U.S. Oil Company joins with a foreign cartel to control the price of oil. If the cartel has a substantial effect on U.S. commerce
both big US Oil and the foreign cartel can be sued for violation of US antitrust laws
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