Question 1

To find a violation of Section 2 of the Sherman Act, if sufficient monopoly power has been proved, the law must then show that the firm has engaged in unfair conduct.

Accepted Answer

A) True 
 B)False

Question 2

Under the Sherman Act, price fixing is the primary and most serious example of a per se violation.

Accepted Answer

A) True 
 B)False

Question 3

One business by itself cannot violate Section 1 of the Sherman Act.

Accepted Answer

A) True 
 B)False

Question 4

Under the 2004 amendments, corporate offenders who violate Sections 1 or 2 of the Sherman Act face fines of up to $100 million per violation.

Accepted Answer

A) True 
 B)False

Question 5

An agreement between a manufacturer and a wholesaler is horizontal.

Accepted Answer

A) True 
 B)False

Question 6

The "rule of reason" requires the courts to balance the anticompetitive effects of behavior in restraint of trade with its positive effects on competition.

Accepted Answer

A) True 
 B)False

Question 7

The National Cooperative Research Act provides that:

Accepted Answer

A) joint ventures in the research and development of new technology are to be judged under the rule of reason test. 
B) treble damages apply to all joint ventures formed in violation of the antitrust laws. 
C) joint venture participants must under all circumstances report their intent to the Justice Department. 
D) joint ventures formed to divide markets and fix prices are not illegal. 
A) joint ventures in the research and development of new technology are to be judged under the rule of reason test. 
B) treble damages apply to all joint ventures formed in violation of the antitrust laws. 
C) joint venture participants must under all circumstances report their intent to the Justice Department. 
D) joint ventures formed to divide markets and fix prices are not illegal.

Question 8

Conglomerate mergers have been challenged only when:

Accepted Answer

A) one of the merging firms would be highly likely to enter the other firm's market. 
B) the merged company would be disproportionately large, compared with the smallest competitors in its industry. 
C) (a) and (b) are correct. 
D) None of the above. 
A) one of the merging firms would be highly likely to enter the other firm's market. 
B) the merged company would be disproportionately large, compared with the smallest competitors in its industry. 
C) (a) and (b) are correct. 
D) None of the above.

Question 9

If United Widgets lowers its price to all buyers of 10 or more widgets, it is not a violation of the Robinson-Patman Act.

Accepted Answer

A) True 
 B)False

Question 10

Failure to comply with Section 1 or 2 of the Sherman Act:

Accepted Answer

A) is a crime and can result in imprisonment. 
B) may subject an individual to a fine of up to $1 million per violation. 
C) may subject a corporation to a fine of $100 million per violation. 
D) All of the above. 
A) is a crime and can result in imprisonment. 
B) may subject an individual to a fine of up to $1 million per violation. 
C) may subject a corporation to a fine of $100 million per violation. 
D) All of the above.

Question 11

A "Vertical Restraint Index" is a measure of relative market share.

Accepted Answer

A) True 
 B)False

Question 12

The Robinson-Patman Act adds to the Clayton Act merger provisions.

Accepted Answer

A) True 
 B)False

Question 13

It is per se illegal under the Sherman Act for sellers to agree to a maximum price, but not a minimum price.

Accepted Answer

A) True 
 B)False

Question 14

The principal objective of antitrust law governing mergers is to maintain competition.

Accepted Answer

A) True 
 B)False

Question 15

Characterizing a type of restraint as per se illegal significantly affects the prosecution of an antitrust suit.

Accepted Answer

A) True 
 B)False

Question 16

Margaret tells the members of the Raleigh Association of Restaurant Owners that they will be able to get a better price on linen supplies (tablecloths, napkins) if they will deal with one supplier rather than split their business between two.They all know Margaret deals with Niagara Linen rather than Cayuga.Under the Sherman Act, if they all sign contracts with Niagara:

Accepted Answer

A) there is no violation since there is no express agreement to boycott Cayuga. 
B) illegality may be implied from this conduct. 
C) there is no concerted action. 
D) this is horizontal market allocation. 
A) there is no violation since there is no express agreement to boycott Cayuga. 
B) illegality may be implied from this conduct. 
C) there is no concerted action. 
D) this is horizontal market allocation.

Question 17

The rule of reason test, under the Sherman Antitrust Act:

Accepted Answer

A) considers the makeup of a relevant industry. 
B) does not consider the defendant's position in that industry. 
C) considers the defendant's need for the financial gain from the restraint of trade. 
D) does not consider competitor's ability to respond to the challenged practice of restraint of trade. 
A) considers the makeup of a relevant industry. 
B) does not consider the defendant's position in that industry. 
C) considers the defendant's need for the financial gain from the restraint of trade. 
D) does not consider competitor's ability to respond to the challenged practice of restraint of trade.

Question 18

A restraint involving collaboration among competitors at the same level in the chain of distribution is:

Accepted Answer

A) a vertical restraint. 
B) a horizontal restraint. 
C) price fixing. 
D) a trust. 
A) a vertical restraint. 
B) a horizontal restraint. 
C) price fixing. 
D) a trust.

Question 19

Creativ-Design, Inc.has 68% of the market share in a particular geographic region for one of its products.Does Creativ-Design have a monopoly? Explain.

Accepted Answer

No exact percentage of market share has

Question 20

The courts have interpreted the Sherman Act as prohibiting all monopolies.

Accepted Answer

A) True 
 B)False

Exam 43: Antitrust

To find a violation of Section 2 of the Sherman Act, if sufficient monopoly power has been proved, the law must then show that the firm has engaged in unfair conduct.

Under the Sherman Act, price fixing is the primary and most serious example of a per se violation.

One business by itself cannot violate Section 1 of the Sherman Act.

Under the 2004 amendments, corporate offenders who violate Sections 1 or 2 of the Sherman Act face fines of up to $100 million per violation.

An agreement between a manufacturer and a wholesaler is horizontal.

The "rule of reason" requires the courts to balance the anticompetitive effects of behavior in restraint of trade with its positive effects on competition.

The National Cooperative Research Act provides that:

Conglomerate mergers have been challenged only when:

If United Widgets lowers its price to all buyers of 10 or more widgets, it is not a violation of the Robinson-Patman Act.

Failure to comply with Section 1 or 2 of the Sherman Act:

A "Vertical Restraint Index" is a measure of relative market share.

The Robinson-Patman Act adds to the Clayton Act merger provisions.

It is per se illegal under the Sherman Act for sellers to agree to a maximum price, but not a minimum price.

The principal objective of antitrust law governing mergers is to maintain competition.

Characterizing a type of restraint as per se illegal significantly affects the prosecution of an antitrust suit.

The rule of reason test, under the Sherman Antitrust Act:

A restraint involving collaboration among competitors at the same level in the chain of distribution is:

Creativ-Design, Inc.has 68% of the market share in a particular geographic region for one of its products.Does Creativ-Design have a monopoly? Explain.

The courts have interpreted the Sherman Act as prohibiting all monopolies.

Introduction to Law

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