Exam 46: Antitrust Law and Unfair Trade Practices

The meeting-the-competition defense does not allow a seller to lower his price below that of his competitor even if it is discriminatory.

Which of the following theories is used to examine the legality of conglomerate mergers?

The aggressiveness with which antitrust laws are enforced differs considerably based on the politics of the President of the United States.

A restraint that is automatically in violation of Section 1 of the Sherman Act is said to be a per se violation.

Antitrust laws apply to which of the following?

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

The following are required to be proven in order to use the failing company doctrine except for which of the following?

Assume that in Colorado the ski resorts can be classified as "large" and "small" and that there are 12 large and 15 small resorts.Some owners own more than one resort.Assume that there are two owners,each of whom owns two large resorts,who plan to merge.Currently,each owner's two resorts have approximately 15 percent to 20 percent of the Colorado ski market.Each owner's two resorts have about 30 percent to 35 percent of the Colorado Front Range day skier (those from the Colorado Springs,Denver,and Fort Collins areas who drive to a resort,ski,and drive home all in one day)market.Assume that Colorado resorts combined have about 40 percent of the Rocky Mountain ski market and about 15 percent of the national ski market.Discuss what is the relevant market and the factors that would be considered in determining whether the merger should be allowed.

A large electronics manufacturer has focused on the computer and office machines markets.Recently,it introduced a videocassette recorder.The manufacturer has frequently considered entering the home entertainment markets,but recently proposed merging with a television and stereo equipment manufacturer rather than entering the market by itself.This merger could be challenged on the basis of:

The primary source of the antitrust laws is:

The U.S.government antitrust case against Microsoft was based upon alleged violations of Section 2 of the Sherman Act.

The traditional way to determine the line of commerce that will be affected by a merger is by applying the functional interchangeability test.

The cost-justification defense to price discrimination applies only to the cost of manufacture,not to shipping or advertising.

The force with which the antitrust laws are enforced differs greatly depending on who is President at the time.Is it proper that these laws should be enforced much more rigorously under some presidential administrations than under others? How could a more consistent enforcement policy be put in place?

The failing company doctrine is not a valid defense to a Section 7 Action.

The Robinson-Patman Act was the first antitrust law enacted in the United States.

Under Section 2 of the Sherman Act,possession of monopoly power is wrongful regardless of how the monopoly power was obtained.

Which of the following is not one of the antitrust statutes?

A car manufacturer was selling several lines of cars,all of which did not include any radios,or tape or CD players,as standard equipment.Fewer and fewer customers were purchasing cars with the optional sound system because the manufacturer's sound systems were overpriced and of inferior quality compared to available aftermarket systems.In fact,some dealers had begun to order all cars with no sound system and install higher quality systems at the dealerships.This manufacturer's cars were popular,so the manufacturer suddenly made a radio tape player standard on its less expensive models and a radio CD player standard on its more expensive models.It raised the prices of the cars by the amount that had previously been charged for the options.At the same time,the manufacturer changed the shape and installation of the sound systems so that no current aftermarket systems could be installed neatly into the dashboard.Discuss any possible antitrust law violations.

The antitrust laws were passed in response to general changes in the national business environment caused by: