Exam 20: Antitrust Law

Based on court rulings, one would expect that retail dealers and manufacturers may discuss ways in which their respective profitability will be enhanced so long as:

Violations of Sections 1 and 2 of the Sherman Act by an individual can result in:

Violations of the Clayton Act are the responsibility of the Justice Department and the Federal Trade Commission.

Under the merger guidelines a major reason to approve a merger is:

Horizontal market division is often held to violate antitrust law because it:

In U.S. v. El Paso Natural Gas, where El Paso wanted to merge with another natural gas pipeline company, the Supreme Court would not allow the merger because:

In Leegin Creative Leather Products v. PSKS, a maker of leather goods would not sell to stores that would not follow its pricing policy (resale price maintenance). The Supreme Court held that:

Which of the following may be at least partly exempt from antitrust laws?

A ____ occurs when the businesses involved operate at the same level of the market and generally in the same market.

A firm's ____ refers to the percentage of the relevant market controlled by the firm.

When firms at the same level of operation, such as several auto parts dealers, get together for some illegal purpose, it is called:

OPEC, the oil cartel, has been held not to violate the antitrust laws because of the power-buyer defense.

Which of the following is not permitted as a possible remedy in antitrust actions?

Fact Pattern 20-2 Vysion produces TVs it sells nationwide. Vysion contracted with Karol's Appliances to make it the exclusive distributor of Vysion TVs in the San Diego area. Karol's received a promise that Vysion would not sell its TVs to any other retailer within 20 miles of Karol's. In its San Diego stores, Karol's has a unique pricing policy. A higher price is charged to customers wearing suits than to customers not wearing suits. Karol's salespeople give non-suit-wearing customers 10% discounts off of the list price, and refuse any discounts to suit-wearing customers. Don's, a rival of Karol's, asked Vysion to allow it to sell its products in San Diego. Vysion refused, pointing to its contract with Karol's. Vysion's distribution policy differs in New York from what it is in California. In New York, Vysion allows every distributor who asks to sell Vysion TVs. However, Vysion requires that New York retailers sign contracts stating that they agree not to sell Vysion products below prices in a monthly "price list" sent by Vysion. In contracts with its distributors nationwide, Vysion insists that sales of its TVs be tied to sales of its VCRs. No consumer is allowed to purchase a Vysion TV without also buying a Vysion VCR. -Refer to Fact Pattern 20-2. The agreement between Vysion and its New York retailers to charge customers according to a "price list" is:

The most common result of opposition to a merger, such as the proposed merger of Staples and Office Depot, is that:

Which of the following has the right to sue for violation of antitrust laws:

Alpha, an expensive brand of watch that sell for $5,000 (suggested retail price), sells to fine jewelry stores for $2,500. Irritated that Amer's Jewelry is selling the watches to the public for $4,000, while competitors are selling for $5,000, stops selling the watches to Amer's. Amer's sues Alpha for antitrust violation. It is likely that Amer's will:

In Eastman Kodak v. Image Technical Services, Kodak was charged with tying the sale of service of their copiers and other equipment to the sale of parts. The Supreme Court ruled:

The cost justification defense used by firms charged with violating Robinson-Patman:

When firms competing at the same level of business agree to allocate territories in a market, and fix prices at the same time, the following may result: