Exam 22: Antitrust Law and Promoting Competition

A group boycott that is intended to eliminate competition is legal.

Monopoly power may be proved by evidence that a firm used its power to control prices and restrict output.

The U.S. Department of Justice can prosecute violations of the Sherman Act.

The Association of Organic Food Growers, which does not include all organic farmers and ranchers, refuses to deal with any parties who do not carry the products of its members. This group boycott is

Joint refusals to deal are never per se violations of the Sherman Act.

A divestiture is an order to a company to cease, or give up, its anticompetitive conduct.

​Thermo Gas, Inc., and Uno Oil Corporation refine and sell gasoline and other petroleum products. To limit the supply of gas on the market and thereby raise prices, Thermo Gas and Uno Oil agree to buy "excess" supplies from dealers and "dispose" of it. This is

Pads & Pods Corporation requires all distributors of its products to sell the products at specified minimum prices. This resale price maintenance agreement is

​Frictionless Lubricant Corporation and Grease Inc. are the principal suppliers of their product in their market. They agree that Frictionless will sell exclusively to retailers and Grease will sell exclusively to wholesalers. Under antitrust law, this market division is most likely

Fresh Vegetables, Inc., and other wholesalers refuse to sell their produce to Good Foods Marketplace, Inc., a retailer. This is

Any agreement among competitors to fix prices is subject to evaluation under the rule of reason.

Market power is the ability of a firm to enter a given market.

To drive its competitors out of a certain geographic segment of its market, Drone Drives, Inc., sets the prices of its products below cost for the buyers in that area. This is

Precision Parts Corporation and Aligned Gears, Inc., are competitors selling certain machine parts that are otherwise generally unattainable in their geographic market. This market includes the states of Minnesota, North Dakota, and South Dakota. Precision Parts and Aligned Gears agree that Precision Parts will no longer sell in Minnesota and that Aligned Gears will no longer sell in North and South Dakota. Have Precision Parts and Aligned Gears violated any antitrust law? If so, which one? Explain. If they had divided their market by type of customer rather than geographic are, would the result be the same? Why or why not?

Domestic Oil Company joins with a foreign cartel to control the price of oil. The cartel has a substantial effect on U.S. commerce. A suit for violation of U.S. antitrust laws can be brought against

Discount Retail Corporation may be engaging in conduct that violates the Sherman Act. To bring an action against the firm requires that its conduct have a significant impact on

Gearbox, Inc., a manufacturer of vehicle parts, refuses to sell to Motor Repair & Replace, Inc., a national vehicle service firm. Gearbox convinces Cam & Cylinder Company, a competitor, to do the same. This is

Under what circumstances would Small's Market, a little store in Rustic, an isolated town, be considered a monopoly? If Small's Market is a monopoly, is it in violation of antitrust law?

Gaucho Ranchland Supplies Corporation believes that Vaquero Stock & Equipment Corporation engages in anticompetitive behavior in an attempt to drive Gaucho, its chief competitor, out of the market. Antitrust laws can be enforced against Vaquero by

For products that are sold nationwide, the relevant geographic market is the entire globe.