Exam 46: Antitrust Law and Unfair Trade Practices

Horizontal price-fixing occurs when:

Tarco is a manufacturer and national distributor of spark plugs.It charges $8 per set for its plugs.Reemco manufactures and distributes spark plugs on the East Coast.In order to get customers away from Tarco,Reemco sells its plugs in New York City for $7 per set.Tarco learns of this and drops its prices to $7 per set only in New York.A Los Angeles customer of Tarco learns of this and sues Tarco for price discrimination.What is the most likely outcome?

The Dream Drive Corporation is a major manufacturer of automobiles in the United States.The Jupiter Company is a small manufacturer of automobiles in the United States.Dream Drive is willing to purchase and merge with Jupiter.No one else is willing to do so.Without some merger,Jupiter is doomed to extinction.Although this merger might usually be prohibited as anticompetitive,which of the following defenses would probably apply?

The rule of reason has no application when determining the legality of non-price vertical restraints on trade.

Many laws require a determination of actual injury before liability or guilt is determined.Is it fair that under the Clayton Act a merger may be prevented merely because the merger is "likely" to substantially lessen competition or create a monopoly? Whether or not you agree with this requirement,why do you think it was put into place?

Which of the following is true about tying arrangements?

A per se violation of the Sherman Act is illegal regardless of the circumstances in which the activity took place.

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

To be liable for a Section 2 violation of the Sherman Antitrust Act,there must be concerted action between two or more firms.

If a paper manufacturer merged with a printing company,it would be a:

What is the usual effect of a nolo contendere plea by the defendant in a government antitrust case?

Plaintiffs often argue for a narrow definition of the defendant's product or service market.

For an antitrust action to be sustained under Section 2 of the Sherman Act,the defendant must possess monopoly power in the relevant market.

Three of the largest automobile dealers agreed among themselves as to what price they would pay to manufacturers for windshields to put in new vehicles.Would this constitute illegal price-fixing? If so,what kind?

Which of the following best describes a tying arrangement?

Which of the following can be a rule of reason antitrust violation?

Texas Western is an international oil company engaged in the exploration for oil,the refinement of oil,and the distribution of oil products.Hollywood,Inc.is a national producer of films.Texas wants to merge with Hollywood.This would be what type of merger?

The history and duration of the restraint have no impact on applying the rule of reason.

Under the Sherman Antitrust Act,division of markets on a product line basis is a rule of reason violation,whereas division of markets on a geographic basis is a per se violation.

The Clayton Act governs tying arrangements involving goods only.