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Exam 26: Antitrust Law

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Question 31

Multiple Choice

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Friction-Lube Corporation and Grease Inc. are the principal suppliers of their products in their market. They agree that Friction-Lube will sell exclusively to retailers and Grease will sell exclusively to wholesalers. Under antitrust law, this market division is most likely​

A) ​a per se violation.
B) ​a violation only if their competitors make similar deals.
C) ​a violation only if their customers agree to honor the deal.
D) ​not a violation.

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

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Question 32

Multiple Choice

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A court deems an agreement between BioTech Inc. and ChemCorp to be a per se violation of the Sherman Act. With respect to this agreement, the court can​

A) ​not determine whether its benefits outweigh its anticompetitive effects.
B) ​considers its benefits to the firms' customers.
C) ​apply the rule of reason.
D) ​review its effect on the relevant market.

E) B) and D)
F) B) and C)

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Question 33

True/False

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An agreement that is deemed a per se violation will be examined by a court to determine whether the agreement actually constitutes a reasonable restraint of trade.

Gearbox, Inc., a manufacturer of vehicle parts, refuses to sell to Motor Repair & Replace, Inc., a national vehicle service firm. Gearbox convinces Cam & Cylinder Company, a competitor, to do the same. This is​

Monopoly power is an extreme amount of market power.

Soft Drink Corporation is charged with violating the Sherman Act through conduct subject to the rule of reason. When applying the rule of reason in this situation, a court will not consider​

Labor unions can organize and bargain without violating antitrust law.

Any action challenged as an attempt to monopolize must have been specifically intended to exclude competitors and garner monopoly power.

In determining the legality of a merger, market concentration has no significance.

Clear View Corporation offers to sell its flat-panel display monitors to Best Computer & Video, Inc., only if Best agrees to buy Clear View's servicing of its products along with the monitors. This is​

The primary measure of monopoly power is a competitor's assessment of the acts of a firm under review.

HVAC Parts Company charges different buyers different prices for identical goods. HVAC's prices are subject to evaluation under​

Consumers Retail Corporation may be engaging in conduct that violates the Sherman Act. To bring an action against the firm requires that its conduct have a significant impact on​

Trail Bikes, Inc., makes and distributes Trail-brand bicycles and accessories to authorized dealers. To prevent price-cutting by dealers in direct competition, Trail Bikes imposes limits on where each dealer can sell Trail products. This is​

The Sherman Act is an example of legislation designed to curb anticompetitive business practices.

A group boycott that is intended to eliminate competition is legal.

Sunrich Company can process solar energy into an inexpensive fuel for internal combustion engines. As an innovator in its market, Sunrich currently has the power to affect the price of its product. This is​

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 have had​

Under an exclusive-dealing contract, a seller promises a buyer a certain territory in which the buyer will have no direct competition.

Spa Company makes and sells beauty salon supplies. By selling its products at prices substantially below the normal cost of production, Spa hopes to drive its competitors from the market. This is​