Exam 14: Business Competition: Antitrust

The price for a Super-Heater X50,a residential water heater,is $372.00 at every store in the greater Atlanta area.The water heater never goes on sale at any of the stores.Super-Heater sells other models of water heaters: the X30 for $301.00 and the X60 for $408.00.There is no store selling the heaters for a different price either.Other companies' water heaters sell at the retail levels at prices ranging from $299-$603.During sales,those prices drop.Is the Super-Heater pricing mechanism a violation of antitrust laws?

Guernzey Milk produces canned milk under its label and several grocery-store labels.The content is the same but the grocery-store labels are sold for less.Guernzey says the packaging for the grocery store brands is cheaper.Any antitrust problems?

The Celler-Kefauver Act is part of the Clayton Act.

The tying product is the desired product.

The manufacturers of several designer purses have met and agreed not to sell their purses to Jolie's Department Store because of Jolie's practice of discounting all items 20 percent below the retail costs at other stores.The manufacturers are concerned about maintaining their images of exclusivity and quality.The agreement among the manufacturers:

Superior skill,foresight,and industry is a:

Resale price maintenance is a per se violation of the Sherman Act.

Cal-Maine Foods was the defendant in an antitrust suit brought by the purchasers of eggs.Cal-Maine is an egg distributor and the suit accused Cal-Maine of manipulating the egg supply in order to increase prices.Egg prices jumped 28% in 2007 and 14% in 2008 as egg supplies dwindled.Cal-Maine said that following industry-wide animal-welfare guidelines resulted in fewer chickens per farm and,as a result,fewer eggs.Which of the following statements is correct?

The Sherman Act does not apply unless sales across state lines are involved.

A vertical merger that prevents market entry is illegal.

Which of the following acts prohibits unfair methods of competition?

The legality of vertical mergers is determined by the relevant geographic and product markets.

Anheuser-Busch,InBev NV,the maker of Bud Light,proposed a merger with Modelo,the maker of Corona.At the time of the proposed merger,AB InBev NV held 39% of the beer market,Miller/Coors held 26%,Modelo held 7%,and Heineken,the last of the big four held 6%.Other beer makers combined hold the remaining 22% of the U.S.beer market.The combination would give AB InBev NV 46% of the market.Modelo has been one of the market players that has resisted the parallel price increases in the industry.​ -Which of the following statements is correct?

Predatory pricing is pricing below actual cost.

Division of markets is a per se violation.

The Noerr-Pennington doctrine:

Joint ventures among competitors are per se violations.