Question 1

State antitrust statutes are usually patterned after the federal antitrust statutes.

Accepted Answer

A) True 
 B)False  True

Question 2

The per se rule is applicable to restraints of trade that are considered inherently anticompetitive.

Accepted Answer

A) True 
 B)False  True

Question 3

Although most price fixing agreements occur between sellers,an agreement among buyers to set the price they will pay for goods or services is also price fixing.

Accepted Answer

A) True 
 B)False  True

Question 4

Assume the three largest automobile manufacturers get together and agree to set certain prices for their automobiles based upon features.Is there any problem with this agreement under the Sherman Act,and if so,what is the problem,and under what rule would the agreement be analyzed?

Accepted Answer

There is a problem with the ag

Question 5

The Sherman Act is the only major antitrust act that includes criminal sanctions.

Accepted Answer

A) True 
 B)False

Question 6

Zach's small bicycle manufacturing company,Peddle Away,is in dire straits.Zach wishes to merge with the very successful and large bicycle manufacturing company,Bikes Unlimited.There is concern that the merger will violate Section 7 of the Clayton Act.What defense would result in the merger being approved,even if it would otherwise violate Section 7?

Accepted Answer

A)  the "failing company" doctrine 
B)  the "troubled company" doctrine 
C)  the "small company" doctrine 
D)  the "fair advantage" doctrine 
E)  the "economic advantage" doctrine 
A)  the "failing company" doctrine 
B)  the "troubled company" doctrine 
C)  the "small company" doctrine 
D)  the "fair advantage" doctrine 
E)  the "economic advantage" doctrine

Question 7

Today,resale price maintenance is a per se violation for both price floors and price ceilings.

Accepted Answer

A) True 
 B)False

Question 8

Illegal price fixing includes setting minimum or maximum prices of fixing the quantity of a product or service to be produced or provided.

Accepted Answer

A) True 
 B)False

Question 9

________ pricing?that is,pricing below average or marginal cost?that is intended to drive our competitors has been held to violate Section 2 of the Sherman Act.

Accepted Answer

A)  Equilibrium 
B)  Wholesale 
C)  Predatory 
D)  Conciliatory 
E)  Monopoly 
A)  Equilibrium 
B)  Wholesale 
C)  Predatory 
D)  Conciliatory 
E)  Monopoly

Question 10

What is the essential element of the "conscious parallelism" defense under Section 1 of the Sherman Act?

Accepted Answer

A)  independent action by the parties, without an agreement between the parties 
B)  knowledge by independent parties of their conduct 
C)  other parties undertaking actions similar to those agreed-upon by the defendants 
D)  a pattern of similar violations 
E)  an injury that cannot be directly traced to the violation 
A)  independent action by the parties, without an agreement between the parties 
B)  knowledge by independent parties of their conduct 
C)  other parties undertaking actions similar to those agreed-upon by the defendants 
D)  a pattern of similar violations 
E)  an injury that cannot be directly traced to the violation

Question 11

Private parties may not intervene in public antitrust actions brought by the government.

Accepted Answer

A) True 
 B)False

Question 12

Section 7 of the Clayton Act tries to prevent potentially anticompetitive mergers before they occur.

Accepted Answer

A) True 
 B)False

Question 13

The legality of non-price vertical restraints of trade under Section 1 of the Sherman Act is examined using the "rule of reason."

Accepted Answer

A) True 
 B)False

Question 14

Under Section 2 of the Sherman Act,rather than making a presumption about whether monopoly power exists,the courts will examine all the facts and circumstances to determine whether monopoly power exists when the defendant holds between ________ percent and ________ percent of the relevant market.

Accepted Answer

A)  thirty; eighty 
B)  twenty; seventy 
C)  zero; fifty 
D)  thirty-three; seventy 
E)  fifty; seventy 
A)  thirty; eighty 
B)  twenty; seventy 
C)  zero; fifty 
D)  thirty-three; seventy 
E)  fifty; seventy

Question 15

Price discrimination is not unlawful if it is done to meet a competitor's price.

Accepted Answer

A) True 
 B)False

Question 16

Competitors who agree that each will serve only a designated portion of the market are engaging in market subordination.

Accepted Answer

A) True 
 B)False

Question 17

Real Wood Company,a furniture manufacturer,acquires a chain of retail furniture stores.What type of a merger is involved?

Accepted Answer

A)  a backward vertical merger 
B)  a forward vertical merger 
C)  a horizontal merger 
D)  a conglomerate merger 
E)  a market extension merger 
A)  a backward vertical merger 
B)  a forward vertical merger 
C)  a horizontal merger 
D)  a conglomerate merger 
E)  a market extension merger

Question 18

Which of the following is not a basis for an unfair competition claim under Section 5 of the Fair Trade Commission Act?

Accepted Answer

A)  the action violates a provision of the Sherman Act 
B)  the action violates the "spirit" of the antitrust laws 
C)  the action allows the party to earn excessive profits 
D)  the action violates public policy 
E)  the action is oppressive or unscrupulous 
A)  the action violates a provision of the Sherman Act 
B)  the action violates the "spirit" of the antitrust laws 
C)  the action allows the party to earn excessive profits 
D)  the action violates public policy 
E)  the action is oppressive or unscrupulous

Question 19

Horizontal price fixing occurs when the competitors in the same line of business agree to set the price of goods or services they sell.

Accepted Answer

A) True 
 B)False

Question 20

What is the legal significance of the distinction between "rule of reason" violations and per se violations under the Sherman Act?

Accepted Answer

A)  Rule of reason violations must be proven beyond a reasonable doubt, while per se violations must be proven by a preponderance of the evidence. 
B)  Rule of reason violations require an agreement with at least one other party, but per se violations can occur without an agreement with others. 
C)  Rule of reason violations relate to horizontal restraints of trade, while per se violations relate to vertical restraints of trade. 
D)  Rule of reason violations relate to actions brought by private parties, and per se violations relate to actions brought by the government. 
E)  Rule of reason violations might be proven to be acceptable, but per se violations are not acceptable under any circumstances. 
A)  Rule of reason violations must be proven beyond a reasonable doubt, while per se violations must be proven by a preponderance of the evidence. 
B)  Rule of reason violations require an agreement with at least one other party, but per se violations can occur without an agreement with others. 
C)  Rule of reason violations relate to horizontal restraints of trade, while per se violations relate to vertical restraints of trade. 
D)  Rule of reason violations relate to actions brought by private parties, and per se violations relate to actions brought by the government. 
E)  Rule of reason violations might be proven to be acceptable, but per se violations are not acceptable under any circumstances.

Exam 33: Antitrust Law

State antitrust statutes are usually patterned after the federal antitrust statutes.

The per se rule is applicable to restraints of trade that are considered inherently anticompetitive.

Although most price fixing agreements occur between sellers,an agreement among buyers to set the price they will pay for goods or services is also price fixing.

Assume the three largest automobile manufacturers get together and agree to set certain prices for their automobiles based upon features.Is there any problem with this agreement under the Sherman Act,and if so,what is the problem,and under what rule would the agreement be analyzed?

The Sherman Act is the only major antitrust act that includes criminal sanctions.

Today,resale price maintenance is a per se violation for both price floors and price ceilings.

Illegal price fixing includes setting minimum or maximum prices of fixing the quantity of a product or service to be produced or provided.

________ pricing?that is,pricing below average or marginal cost?that is intended to drive our competitors has been held to violate Section 2 of the Sherman Act.

What is the essential element of the "conscious parallelism" defense under Section 1 of the Sherman Act?

Private parties may not intervene in public antitrust actions brought by the government.

Section 7 of the Clayton Act tries to prevent potentially anticompetitive mergers before they occur.

The legality of non-price vertical restraints of trade under Section 1 of the Sherman Act is examined using the "rule of reason."

Under Section 2 of the Sherman Act,rather than making a presumption about whether monopoly power exists,the courts will examine all the facts and circumstances to determine whether monopoly power exists when the defendant holds between ________ percent and ________ percent of the relevant market.

Price discrimination is not unlawful if it is done to meet a competitor's price.

Competitors who agree that each will serve only a designated portion of the market are engaging in market subordination.

Real Wood Company,a furniture manufacturer,acquires a chain of retail furniture stores.What type of a merger is involved?

Which of the following is not a basis for an unfair competition claim under Section 5 of the Fair Trade Commission Act?

Horizontal price fixing occurs when the competitors in the same line of business agree to set the price of goods or services they sell.

What is the legal significance of the distinction between "rule of reason" violations and per se violations under the Sherman Act?

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Under Section 2 of the Sherman Act,rather than making a presumption about whether monopoly power exists,the courts will examine all the facts and circumstances to determine whether monopoly power exists when the defendant holds between percent and percent of the relevant market.