Exam 20: Antitrust Law

If a firm engages in price discrimination, it may defend itself by showing that there is a cost justification for charging different customers different prices.

Price discrimination was made unlawful by:

Vertical nonprice restraints, such as territorial restraints imposed by producers on retailers, have, in recent years, been viewed by the Supreme Court:

Antitrust law refers to:

The sponsors of the Sherman Antitrust Act saw it as:

A hospital requires that patients use the food services provided by one firm with which the hospital contracts. Pizza Hut wants to sell its food to patients in the hospital too, but the hospital refuses. Pizza Hut sues the hospital because of the tie-in between hospital stays and food service. The Supreme Court will probably hold the hospital's rule is:

The Sherman Act expressly holds illegal:

The first antitrust statute enacted by Congress (in 1890) was:

In Eastman Kodak Co. v. Image Technical Services, Inc., the Supreme Court found evidence of an illegal tying arrangement between product service and the sale of spare parts for Kodak machinery.

A private party who sues another party for violating the Sherman Act, and who wins, gets three times the actual damages plus court costs and attorneys' fees.

Fact Pattern 20-1 MicroManage is the fastest growing home-software producer in the country. In 2000, it sold 6% of all home software in the U.S., but in 2011, it sold 55% of all home software. A recent issue of Computer Universe said that MicroManage was "the most dominant and aggressive of all home-software developers." Home software is a small part of the entire software industry. In 2011, MicroManage proposed a merger with Game Master, its main rival. Game Master was responsible for 10% of all home-software sales in 2010. MicroManage's president says that the combination of the firms will allow MicroManage to lower costs and pass the savings on to its customers. The Department of Justice filed suit to stop this merger, claiming the combination would give monopoly power to the merged firm. Justice insists that consumers would lose in the end. -Refer to Fact Pattern 20-1. MicroManage executives decide that if they are not allowed to merge with Game Master, MicroManage will propose to GameMaster and other home-software producers that they allocate customers on a geographic basis. Such an agreement:

A tying arrangement occurs when:

A horizontal restraint of trade is likely to occur when:

Which antitrust statute carries the most severe penalties?

Producers of quality brand-name products often favor resale price maintenance because it:

Because the antitrust statutes are unclear about exactly what is illegal monopolization, it is up to the courts to decide the primary factors.

Retail dealers and manufacturers may discuss ways in which their respective profitability will be enhanced so long as:

To recover damages under antitrust law, plaintiffs must have:

The 1936 legislation known as the Robinson-Patman Act, amended which law?

Violators of the Sherman Act face fines as high as $100 million per violation.