Question 1

A marketing representative who is tempted to engage in price-fixing due to heavy competition and similar prices for competitors' products should:

Accepted Answer

A)  emphasize factors of her product that do not involve price. 
B)  emphasize service, reliability, and other factors of her company. 
C)  understand the serious criminal and civil penalties of engaging in price-fixing. 
D)  All the above. 
A)  emphasize factors of her product that do not involve price. 
B)  emphasize service, reliability, and other factors of her company. 
C)  understand the serious criminal and civil penalties of engaging in price-fixing. 
D)  All the above.

Question 2

For the first 70 years after the Sherman Act was enacted,judges were reluctant to enforce it since scholars and economic experts believed the law was a violation of the Constitution's Commerce Clause.

Accepted Answer

A) True 
 B)False

Question 3

The chain of Mega Hardware stores agreed with Lock Tight Manufacturing not to carry any brand of locks and door handles other than those manufactured by Lock Tight.Mighty Lock threatened to sue for antitrust violations.On what basis and under what statute(s)would Mighty Lock sue? What factors would a court consider in deciding the case?

Accepted Answer

Mighty Lock would sue Mega Hardware for

Question 4

A vertical allocation of customers or territory:

Accepted Answer

A)  is a per se violation of Section 1 of the Sherman Act. 
B)  is a rule of reason violation of the Sherman Act. 
C)  is not a violation of the Sherman Act. 
D)  is illegal if it adversely affects competition at any stage of the marketing channel. 
A)  is a per se violation of Section 1 of the Sherman Act. 
B)  is a rule of reason violation of the Sherman Act. 
C)  is not a violation of the Sherman Act. 
D)  is illegal if it adversely affects competition at any stage of the marketing channel.

Question 5

Such an agreement is:

Accepted Answer

A)  a per se violation of antitrust law. 
B)  subject to the rule of reason test to determine if it violates antitrust law. 
C)  not governed by antitrust law since educational institutions are exempt from this area of law. 
D)  subject to state regulations but not to the Justice Department. 
A)  a per se violation of antitrust law. 
B)  subject to the rule of reason test to determine if it violates antitrust law. 
C)  not governed by antitrust law since educational institutions are exempt from this area of law. 
D)  subject to state regulations but not to the Justice Department.

Question 6

A refusal to deal:

Accepted Answer

A)  is a right to decide with whom to do or not to do business and cannot be legally limited. 
B)  is a rule of reason violation of the Sherman Act and is illegal if it harms competition. 
C)  is an agreement in which a buyer refuses to purchase goods from a supplier unless the supplier also purchases items from the buyer. 
D)  occurs when a manager refuses to recognize that price-fixing is a problem. 
A)  is a right to decide with whom to do or not to do business and cannot be legally limited. 
B)  is a rule of reason violation of the Sherman Act and is illegal if it harms competition. 
C)  is an agreement in which a buyer refuses to purchase goods from a supplier unless the supplier also purchases items from the buyer. 
D)  occurs when a manager refuses to recognize that price-fixing is a problem.

Question 7

Antitrust laws in the United States remained constant through most of the 1900s.

Accepted Answer

A) True 
 B)False

Question 8

The U.S.Attorney General brought a Sherman Act lawsuit against competitors in the widget market.The Attorney General alleged that these companies agreed to charge $20 for widgets.Which of the following defenses may apply?

Accepted Answer

A)  That the $20 price was fair. 
B)  That the $20 price was lower than the price before the agreement. 
C)  That the businesses did not agree to charge $20 for widgets. 
D)  That the competitors would have gone out of business without the agreement. 
A)  That the $20 price was fair. 
B)  That the $20 price was lower than the price before the agreement. 
C)  That the businesses did not agree to charge $20 for widgets. 
D)  That the competitors would have gone out of business without the agreement.

Question 9

Violations of antitrust law are either per se violations or rule of reason violations.What are the differences between these two types of violations? Give examples of each.

Accepted Answer

A per se violation is a violation that i

Question 10

A monopoly is illegal:

Accepted Answer

A)  under any circumstances, under Section 2 of the Sherman Act. 
B)  only if it is gained or maintained by using wrongful tactics. 
C)  if you have greater than 50 percent of market share. 
D)  any time there are no interchangeable products. 
A)  under any circumstances, under Section 2 of the Sherman Act. 
B)  only if it is gained or maintained by using wrongful tactics. 
C)  if you have greater than 50 percent of market share. 
D)  any time there are no interchangeable products.

Question 11

Reciprocal dealing is a type of vertical cooperative strategy.

Accepted Answer

A) True 
 B)False

Question 12

The Clayton Act prohibits anti-competitive mergers.

Accepted Answer

A) True 
 B)False

Question 13

The most accurate statement about the Robinson-Patman Act is:

Accepted Answer

A)  It has rarely been enforced in recent years. 
B)  The U.S. government has stepped up its enforcement during the last decade. 
C)  It has been declared unconstitutional. 
D)  It was repealed by Congress in 1998. 
A)  It has rarely been enforced in recent years. 
B)  The U.S. government has stepped up its enforcement during the last decade. 
C)  It has been declared unconstitutional. 
D)  It was repealed by Congress in 1998.

Question 14

Explain the overall purposes of the Sherman Antitrust Act,the Clayton Act,and the Robinson-Patman Act.How do each of these Acts relate to each other?

Accepted Answer

The Sherman Antitrust Act was created in

Question 15

The traditional formula for determining damages for a violation of the Robinson-Patman Act was to:

Accepted Answer

A)  calculate the estimated amount of lost profits. 
B)  determine the difference between the two prices and multiply the difference by the number of units purchased. 
C)  allow a jury to determine the amount of punitive damages without using any particular formula. 
D)  All the above. 
A)  calculate the estimated amount of lost profits. 
B)  determine the difference between the two prices and multiply the difference by the number of units purchased. 
C)  allow a jury to determine the amount of punitive damages without using any particular formula. 
D)  All the above.

Question 16

The FTC blocked the merger of Staples,Inc.and Office Depot because they controlled a large percentage of the national market for office supplies.

Accepted Answer

A) True 
 B)False

Question 17

In the Fears v.Wilhelmina Model Agency,Inc.case,the court held:

Accepted Answer

A)  parallel business behavior conclusively establishes agreement sufficient to constitute a Sherman Act offense. 
B)  in this case the defendants did not possess a common rational motive to conspire. 
C)  plaintiffs offering parallel conduct as evidence of an antitrust conspiracy must demonstrate additional circumstances in order to infer a conspiracy. 
D)  plaintiffs did not need to demonstrate "plus factors" in this case since the defendants' conduct was egregious. 
A)  parallel business behavior conclusively establishes agreement sufficient to constitute a Sherman Act offense. 
B)  in this case the defendants did not possess a common rational motive to conspire. 
C)  plaintiffs offering parallel conduct as evidence of an antitrust conspiracy must demonstrate additional circumstances in order to infer a conspiracy. 
D)  plaintiffs did not need to demonstrate "plus factors" in this case since the defendants' conduct was egregious.

Question 18

A major motion picture distributor offers to provide a television station with three very popular,desirable films.However,as part of the agreement,the distributor requires that the television station also purchase four films that are not very desirable.This type of arrangement is called a:

Accepted Answer

A)  reciprocal dealing agreement. 
B)  reverter arrangement. 
C)  joint custody arrangement. 
D)  tying arrangement. 
A)  reciprocal dealing agreement. 
B)  reverter arrangement. 
C)  joint custody arrangement. 
D)  tying arrangement.

Question 19

Per se violations are subject to both civil and criminal penalties.

Accepted Answer

A) True 
 B)False

Question 20

Assume that three automobile manufacturers all merged into one car company.Such a merger would be a:

Accepted Answer

A)  vertical merger. 
B)  vertical cooperative arrangement merger. 
C)  horizontal merger. 
D)  intracompetitive merger. 
A)  vertical merger. 
B)  vertical cooperative arrangement merger. 
C)  horizontal merger. 
D)  intracompetitive merger.

Exam 38: Antitrust

A marketing representative who is tempted to engage in price-fixing due to heavy competition and similar prices for competitors' products should:

For the first 70 years after the Sherman Act was enacted,judges were reluctant to enforce it since scholars and economic experts believed the law was a violation of the Constitution's Commerce Clause.

A vertical allocation of customers or territory:

Such an agreement is:

A refusal to deal:

Antitrust laws in the United States remained constant through most of the 1900s.

The U.S.Attorney General brought a Sherman Act lawsuit against competitors in the widget market.The Attorney General alleged that these companies agreed to charge $20 for widgets.Which of the following defenses may apply?

Violations of antitrust law are either per se violations or rule of reason violations.What are the differences between these two types of violations? Give examples of each.

A monopoly is illegal:

Reciprocal dealing is a type of vertical cooperative strategy.

The Clayton Act prohibits anti-competitive mergers.

The most accurate statement about the Robinson-Patman Act is:

Explain the overall purposes of the Sherman Antitrust Act,the Clayton Act,and the Robinson-Patman Act.How do each of these Acts relate to each other?

The traditional formula for determining damages for a violation of the Robinson-Patman Act was to:

The FTC blocked the merger of Staples,Inc.and Office Depot because they controlled a large percentage of the national market for office supplies.

In the Fears v.Wilhelmina Model Agency,Inc.case,the court held:

A major motion picture distributor offers to provide a television station with three very popular,desirable films.However,as part of the agreement,the distributor requires that the television station also purchase four films that are not very desirable.This type of arrangement is called a:

Per se violations are subject to both civil and criminal penalties.

Assume that three automobile manufacturers all merged into one car company.Such a merger would be a:

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