Question 1

The Supreme Court considers market divisions between competing firms to be so inherently anti-competitive as to constitute per se violations of the Sherman Act.

Accepted Answer

A) True 
 B)False

Question 2

An equilibrium in which scarce societal resources are allocated to the production of various goods and services up to the point where the cost of the resources equals the benefit society reaps form their use is:

Accepted Answer

A)  productive efficiency. 
B)  allocative efficiency. 
C)  true efficiency. 
D)  product efficiency. 
A)  productive efficiency. 
B)  allocative efficiency. 
C)  true efficiency. 
D)  product efficiency.

Question 3

Unilateral conduct may violate Section 1 of the Sherman Act under some circumstances.

Accepted Answer

A) True 
 B)False

Question 4

Horizontal agreements among competitors to avoid competition on nonprice matters cannot be a violation of Section 1 of the Sherman Act.

Accepted Answer

A) True 
 B)False

Question 5

Under which of the following situations will courts usually find pricing legal?

Accepted Answer

A)  When the prices are above average variable cost but below average total cost and the company has excess capacity. 
B)  When the prices are above average variable cost but below average total cost and the company does not have excess capacity. 
C)  When the prices are below average variable cost and below average total cost and the company does not have excess capacity. 
D)  Only when prices are above both average variable cost and average total cost. 
A)  When the prices are above average variable cost but below average total cost and the company has excess capacity. 
B)  When the prices are above average variable cost but below average total cost and the company does not have excess capacity. 
C)  When the prices are below average variable cost and below average total cost and the company does not have excess capacity. 
D)  Only when prices are above both average variable cost and average total cost.

Question 6

Vertical market division between a franchisor and a franchisee may be lawful when interbrand competition is enhanced by the limitation on intrabrand competition.

Accepted Answer

A) True 
 B)False

Question 7

Courts apply the per se rule when reviewing most tying arrangements and will,therefore,consider business justifications proffered by the tying firm.

Accepted Answer

A) True 
 B)False

Question 8

Fact Pattern 16-1
Patty owns and operates a gym. Her main competitor is Jason who runs another gym three streets from her. They cater to the same clientele. Patty and Jason keep trying to undercut each other in order to attract customers. One evening Patty sees Jason in the local coffee shop and sits down to talk with him. They discuss how difficult it is to do upgrades and make money with the prices they are charging. Patty winked at Jason and said "You know, charging $80 per month would enable a good profit margin." The next day Patty started charging $80 per month as did Jason. Customers started complaining particularly after another coffee drinker and gym customer at a table sitting at a table near Patty and Jason made it known that they had seemed very cozy. Patty and Jason deny any agreement to set the same price for gym membership. They avow that the decision was made by each of them independently.
-Refer to Fact Pattern 16-1.Is the fact that no express words passed between Patty and Jason a defense to charges of antitrust violation?

Accepted Answer

A)  Yes, because direct evidence is required in order to establish an illegal agreement to fix prices. 
B)  Yes, both because direct evidence is required in order to establish an illegal agreement to fix prices and because the courts require evidence of an explicit agreement in such cases. 
C)  It is a defense to charges of criminal antitrust violations, but not to civil antitrust violations. 
D)  No, because a knowing wink can mean more than words. 
A)  Yes, because direct evidence is required in order to establish an illegal agreement to fix prices. 
B)  Yes, both because direct evidence is required in order to establish an illegal agreement to fix prices and because the courts require evidence of an explicit agreement in such cases. 
C)  It is a defense to charges of criminal antitrust violations, but not to civil antitrust violations. 
D)  No, because a knowing wink can mean more than words.

Question 9

The Robinson-Patman Act prohibits:

Accepted Answer

A)  certain price discrimination. 
B)  monopolies and attempts to monopolize. 
C)  every contract, combination or conspiracy in restraint of trade. 
D)  mergers that threaten competition. 
A)  certain price discrimination. 
B)  monopolies and attempts to monopolize. 
C)  every contract, combination or conspiracy in restraint of trade. 
D)  mergers that threaten competition.

Question 10

Without further inquiry,boycotts are per se illegal under the Sherman Act.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is NOT a defense to a Robinson-Patman price discrimination claim?

Accepted Answer

A)  Predatory pricing 
B)  Not actual competitors for the same customer 
C)  Cost justification 
D)  Changing conditions 
A)  Predatory pricing 
B)  Not actual competitors for the same customer 
C)  Cost justification 
D)  Changing conditions

Question 12

The Robinson-Patman Act prohibits a manufacturer from making any price discrimination among its customers.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not an illegal horizontal market division?

Accepted Answer

A)  Division by a class of customers 
B)  Division by exclusive distributorships 
C)  Division by geographic territory 
D)  Restricting product output 
A)  Division by a class of customers 
B)  Division by exclusive distributorships 
C)  Division by geographic territory 
D)  Restricting product output

Question 14

A(n)__________ is made up of product or service offerings by different manufacturers or sellers that are economically interchangeable and may therefore be said to compete.

Accepted Answer

A)  interchangeable-brand product market 
B)  market power interchange 
C)  multiple-brand product market 
D)  consumer surplus brand market 
A)  interchangeable-brand product market 
B)  market power interchange 
C)  multiple-brand product market 
D)  consumer surplus brand market

Question 15

What must a plaintiff demonstrate for liability to attach under Section 1 of the Sherman Act?

Accepted Answer

A plaintiff must establish that (1)there

Question 16

Patented or copyrighted products may confer market power on the owner in tying cases when there are high switching costs.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is true regarding private suits to enforce the Sherman Act?

Accepted Answer

A)  Private plaintiffs may recover three times the damages they have sustained as a result of violations of the act. 
B)  Liability is joint and several among all conspirators. 
C)  There is no requirement of standing. 
D)  Private plaintiffs may recover three times the damages they have sustained as a result of violations of the act, and liability is joint and several among all conspirators. 
A)  Private plaintiffs may recover three times the damages they have sustained as a result of violations of the act. 
B)  Liability is joint and several among all conspirators. 
C)  There is no requirement of standing. 
D)  Private plaintiffs may recover three times the damages they have sustained as a result of violations of the act, and liability is joint and several among all conspirators.

Question 18

The agreement of all the commercial airlines not to lower their fares would be an example of a:

Accepted Answer

A)  vertical restraint of trade. 
B)  horizontal restraint of trade. 
C)  tying arrangement. 
D)  monopoly. 
A)  vertical restraint of trade. 
B)  horizontal restraint of trade. 
C)  tying arrangement. 
D)  monopoly.

Question 19

Courts look more favorably on reductions in intrabrand competition when there is vigorous interbrand competition that can prevent the reduction in intrabrand competition from harming consumers.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is the objective of the rule of reason rule?

Accepted Answer

A)  To determine whether the requirements of the per se rule have been satisfied. 
B)  To determine whether, on balance, the activity at issue promotes or restrains competition. 
C)  To determine whether in a particular situation a horizontal price fixing has actually harmed consumers. 
D)  To determine if providers of a good acted reasonably in engaging in a boycott. 
A)  To determine whether the requirements of the per se rule have been satisfied. 
B)  To determine whether, on balance, the activity at issue promotes or restrains competition. 
C)  To determine whether in a particular situation a horizontal price fixing has actually harmed consumers. 
D)  To determine if providers of a good acted reasonably in engaging in a boycott.

Exam 16: Antitrust.

The Supreme Court considers market divisions between competing firms to be so inherently anti-competitive as to constitute per se violations of the Sherman Act.

An equilibrium in which scarce societal resources are allocated to the production of various goods and services up to the point where the cost of the resources equals the benefit society reaps form their use is:

Unilateral conduct may violate Section 1 of the Sherman Act under some circumstances.

Horizontal agreements among competitors to avoid competition on nonprice matters cannot be a violation of Section 1 of the Sherman Act.

Under which of the following situations will courts usually find pricing legal?

Vertical market division between a franchisor and a franchisee may be lawful when interbrand competition is enhanced by the limitation on intrabrand competition.

Courts apply the per se rule when reviewing most tying arrangements and will,therefore,consider business justifications proffered by the tying firm.

The Robinson-Patman Act prohibits:

Without further inquiry,boycotts are per se illegal under the Sherman Act.

Which of the following is NOT a defense to a Robinson-Patman price discrimination claim?

The Robinson-Patman Act prohibits a manufacturer from making any price discrimination among its customers.

Which of the following is not an illegal horizontal market division?

A(n)__________ is made up of product or service offerings by different manufacturers or sellers that are economically interchangeable and may therefore be said to compete.

What must a plaintiff demonstrate for liability to attach under Section 1 of the Sherman Act?

Patented or copyrighted products may confer market power on the owner in tying cases when there are high switching costs.

Which of the following is true regarding private suits to enforce the Sherman Act?

The agreement of all the commercial airlines not to lower their fares would be an example of a:

Courts look more favorably on reductions in intrabrand competition when there is vigorous interbrand competition that can prevent the reduction in intrabrand competition from harming consumers.

Which of the following is the objective of the rule of reason rule?

Law, Value Creation, and Risk Management.

Ethics and the Law.

Sources of Law, Courts, and Dispute Resolution.

Constitutional Bases for Business Regulation.

Agency.

Administrative Law.

Contracts.

Sales, Licensing, and E-Commerce.

Torts and Privacy Protection.

Product Liability.

Intellectual Property.

The Employment Agreement.

Civil Rights and Employment Discrimination.

Criminal Law.

Environmental Law and Sustainability.

Consumer Protection.

Real Property and Land Use.

Forms of Business Organizations.

Directors, Officers, and Controlling Shareholders.

Public and Private Offerings of Securities.

Securities Fraud and Insider Trading.

Debtor-Creditor Relations and Bankruptcy.

International Law and Transactions.

Filters