Exam 40: Antitrust

Sareno Cheese Co.supplies mozzarella cheese to pizza restaurants at $1.50 per pound.In order to snare the business from a pizzeria, Sareno offers to sell them cheese at $1.25 per pound.This will violate the Robinson- Patman Act unless:

A wholesale manufacturer gets a retail outlet for its goods through a merger.This is a horizontal merger.

Boycotts that are in violation of the Sherman Act include:

For purposes of the concerted action requirement under Section 1 of the Sherman Act:

The National Cooperative Research Act is designed to inhibit formation of joint ventures.

The Justice Department's policy toward conduct by foreign companies is to:

The National Cooperative Research Act:

Section 1 of the Sherman Act prohibits unilateral conduct.

Barb sets her prices to undercut her competitors by 20%.This is:

The Sherman Act:

The common law traditionally favored competition.

If X Co.agrees with S Co.that X will not sell beer in Wisconsin if S will not sell beer in Colorado, under the Sherman Act, this is:

The main goal of antitrust regulation is to prevent competitive behavior among firms.

Three of the airline companies agree that they will not go any lower than $100 each way for coast-to-coast tickets. This is:

Major, Inc.has 68% of the market share in a particular geographic region for one of its products.Does Major have a monopoly? Explain.

In expanding its policy of enforcement regarding the Sherman Act to cover conduct by foreign companies that harms exports, the Justice Department has indicated that it will focus primarily on boycotts and cartels that injure the export of U.S.products and services.

Each corporation tries to match the other's product designs and specifications, prices, and advertising strategies.As a result, the two corporations have similar products, prices, and profits.Is this a violation of the antitrust laws? ANSWER: This may very well be a violation of Section 1 of the Sherman Act.However, it is not easy to distinguish concerted action from unilateral but parallel action.Conscious parallelism alone as shown by individual acts is not sufficient to infer a conspiracy in violation of Section 1.There must also be an additional factor, such as complex action taken by each competitor that would only benefit each competitor if all of them took similar action.Identical sealed bids from each competitor might also indicate a conspiracy.The Sherman Act requires concerted action and not just unilateral or parallel action. POINTS: 1 DIFFICULTY: Challenging LEARNING OBJECTIVES: SRBL.MANN.15.40.01 - 40.01 NATIONAL STANDARDS: United States - AICPA: BB-Risk Analysis STATE STANDARDS: United States - NC - AICPA BB-Legal TOPICS: A-Head: Sherman Act KEYWORDS: Blooms: Application -Explain how price differentials may be justified so that the Robinson-Patman Act is not violated.

Tying arrangements have been labeled by the Supreme Court as serving "hardly any purpose beyond the suppression of competition."

The definition of price-fixing includes agreements that:

Under Section 1 of the Sherman Act, which of the following is illegal per se?