Question 1

Section 7 of the Clayton Act prohibits mergers where evidence indicates that the merger:

Accepted Answer

A) is between companies who are solely engaged in intrastate commerce. 
B) may have the effect of substantially lessening competition in any line of commerce. 
C) involves companies that manufacture functionally uninterchangeable products. 
D) involves companies that might fail if they were not allowed to merge. 
A) is between companies who are solely engaged in intrastate commerce. 
B) may have the effect of substantially lessening competition in any line of commerce. 
C) involves companies that manufacture functionally uninterchangeable products. 
D) involves companies that might fail if they were not allowed to merge.

Question 2

Odyssey Corp. ,a wholesaler of children's toys,sells retailers across the country the exceedingly popular Trojan Horse toy at a price of $14 per item.Odyssey has learned that one of its competitors,Iliad Co. ,is selling the Trojan Horse toy at a price of $12 per item to all retailers in the State of Utah.Odyssey would like to respond appropriately to Iliad's actions.Which of the following statements accurately sets forth how Odyssey may respond without risking a violation of the Robinson-Patman Act?

Accepted Answer

A) Odyssey may begin selling the Trojan Horse toy at a price of $12 per item to Utah retailers,while keeping the price at $14 per item for retailers elsewhere in the country. 
B) Odyssey may begin selling the Trojan Horse toy at a price of $11.75 per item to Utah retailers,while keeping the price at $14 per item for retailers elsewhere in the country. 
C) Odyssey may begin selling the Trojan Horse toy at a price of $12 per item to Utah retailers,but only if it lowers the price to $12 per item for retailers elsewhere in the country. 
D) Odyssey may begin selling the Trojan Horse at a price of $11.75 per item all over the country. 
A) Odyssey may begin selling the Trojan Horse toy at a price of $12 per item to Utah retailers,while keeping the price at $14 per item for retailers elsewhere in the country. 
B) Odyssey may begin selling the Trojan Horse toy at a price of $11.75 per item to Utah retailers,while keeping the price at $14 per item for retailers elsewhere in the country. 
C) Odyssey may begin selling the Trojan Horse toy at a price of $12 per item to Utah retailers,but only if it lowers the price to $12 per item for retailers elsewhere in the country. 
D) Odyssey may begin selling the Trojan Horse at a price of $11.75 per item all over the country.

Question 3

Okeydokey,Inc.sells its canned beets to its wholly owned subsidiary,Buylow Co. ,which then sells the beets in the nationwide chain of Buylow grocery stores.In addition,Okeydokey sells canned beets to various other grocery store chains.The beets sold by Okeydokey to Buylow are packaged by Okeydokey under the Buylow label.The beets sold by Okeydokey to the other grocery store chains are packaged under the Okeydokey label.Despite the different names,however,the beets sold by Okeydokey under the two labels are the same in quality.The price at which Okeydokey sells the beets to Buylow is significantly lower than the price at which it sells the beets to the other chains.One of the other chains has brought a lawsuit under the Robinson-Patman Act against Okeydokey on the theory that Okeydokey engaged in price discrimination.Has Okeydokey violated the Robinson-Patman Act? Explain your reasoning.

Accepted Answer

Okeydokey has not violated the Robinson-

Question 4

Huge,Inc.owns an east coast grocery chain.It has recently acquired a west coast grocery chain.This is an example of a:

Accepted Answer

A) product extension merger. 
B) horizontal merger. 
C) market extension merger. 
D) vertical merger. 
A) product extension merger. 
B) horizontal merger. 
C) market extension merger. 
D) vertical merger.

Question 5

If Acme Corp.and Bogus,Inc.both manufacture product X but no other products,the relevant product market for purposes of an antitrust challenge to a merger between Acme and Bogus will not be a crucial consideration.

Accepted Answer

A) True 
 B)False

Question 6

The relevant geographic markets in the case of merger between competitors are the markets in which they actually compete.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is a discount sometimes granted to buyers at various levels in a product's chain of distribution because of differences in the operations those buyers perform in the distribution system?

Accepted Answer

A) Partial payment discount 
B) Functional discount 
C) Quantity discount 
D) Accumulation discount 
A) Partial payment discount 
B) Functional discount 
C) Quantity discount 
D) Accumulation discount

Question 8

Bigcorp,Inc. ,a huge conglomerate with interests in various industries,is acquiring Odorific Co. ,the nation's leading manufacturer of men's socks.None of Bigcorp's current "family" of companies purchases socks,nor do any of Bigcorp's suppliers.Bigcorp purchased Odorific after a study conducted by Bigcorp concluded that startup costs in the sock industry made a new entry impractical,and that none of the existing men's sock manufacturers other than Odorific could be acquired for a reasonable price.Odorific's competitors were stunned by the acquisition.They wish to challenge the acquisition.Which theory of attack best suits this case? Explain your reasoning.

Accepted Answer

The "unfair advantage" theory best suits

Question 9

For ________,cost justification is the primary statutory defense to liability under Section 2(a)of the Robinson-Patman Act.

Accepted Answer

A) functional discounts 
B) accumulation pricing 
C) quantity discounts 
D) predatory pricing 
A) functional discounts 
B) accumulation pricing 
C) quantity discounts 
D) predatory pricing

Question 10

The Local Government Antitrust Act of 1984 eliminates damage actions against municipalities and their officers,agents,and employees for antitrust violations and makes injunctive relief the sole remedy in such cases.

Accepted Answer

A) True 
 B)False

Question 11

In a Clayton Act Section 7-based challenge to a merger,the court's adoption of a broad relevant market definition will usually enhance the government's or private plaintiff's difficulty in demonstrating the challenged merger's probable anticompetitive effect.

Accepted Answer

A) True 
 B)False

Question 12

In the European Union (EU),the European Commission has considerable authority to quash a merger through its own action.

Accepted Answer

A) True 
 B)False

Question 13

The Federal Trade Commission (FTC)has the power to enforce the Clayton Act through:

Accepted Answer

A) restraining orders. 
B) cease and desist orders. 
C) preliminary investigation orders. 
D) suspension orders. 
A) restraining orders. 
B) cease and desist orders. 
C) preliminary investigation orders. 
D) suspension orders.

Question 14

Big Corp.(BC)is in the business of making and selling plastic products.Dominant and Micro both buy plastic products of similar grade and quality regularly from BC.Dominant is the biggest customer of BC while Micro usually buys very small quantities.Due to an unexpected shortfall of raw materials,BC anticipates significant reduction in plastic production at its plants.To maintain supply of plastic products to Dominant,BC quotes a 40 percent higher price for its products to Micro.Will this amount to a violation of Section 2(a)of the Robinson-Patman Act?

Accepted Answer

A) Yes,because BC is committing primary level price discrimination. 
B) No,because Dominant deserves the preferential treatment. 
C) Yes,because BC is adversely affecting competition at its customer's level. 
D) No,because BC has not made any sales at higher prices to Micro. 
A) Yes,because BC is committing primary level price discrimination. 
B) No,because Dominant deserves the preferential treatment. 
C) Yes,because BC is adversely affecting competition at its customer's level. 
D) No,because BC has not made any sales at higher prices to Micro.

Question 15

Gorgeous is a conglomerate and its major businesses include department store chains and grocery store chains.Gorgeous recently acquired Connect Corp. ,a mobile-network operator.Connect has the third-largest share of the mobile-network market.This is Gorgeous's first venture into the mobile-network business.Which of the following theories is the most appropriate one for challenging Gorgeous's acquisition of Connect under Section 7 of the Clayton Act?

Accepted Answer

A) Elimination of actual potential competition 
B) Potential reciprocity 
C) Unfair advantage 
D) Elimination of perceived potential competition 
A) Elimination of actual potential competition 
B) Potential reciprocity 
C) Unfair advantage 
D) Elimination of perceived potential competition

Question 16

In reference to Section 8 of the Clayton Act,what does the term interlock mean?

Accepted Answer

A) When the same corporate officers serve in competing corporations 
B) When the capital funding of a corporation is from a foreign country 
C) When a corporation is incorporated by the federal government instead of the state 
D) When competitors are using the same supplier in the same market 
A) When the same corporate officers serve in competing corporations 
B) When the capital funding of a corporation is from a foreign country 
C) When a corporation is incorporated by the federal government instead of the state 
D) When competitors are using the same supplier in the same market

Question 17

Historically,courts seeking to determine the legality of vertical mergers have first tended to look at:

Accepted Answer

A) the increase in market entry barriers for new competitors. 
B) the elimination of potential competition in the acquired firm's market. 
C) the economic efficiency of such vertical integration. 
D) the share of the relevant market foreclosed to competition. 
A) the increase in market entry barriers for new competitors. 
B) the elimination of potential competition in the acquired firm's market. 
C) the economic efficiency of such vertical integration. 
D) the share of the relevant market foreclosed to competition.

Question 18

Under the Clayton Act,private parties may sue for ________ if they are injured or threatened with injury by another party's violation of the statute.

Accepted Answer

A) negligence 
B) criminal penalties 
C) interference with a business relationship 
D) treble damages 
A) negligence 
B) criminal penalties 
C) interference with a business relationship 
D) treble damages

Question 19

In the case in the text,Brooke Group Ltd.V.Brown Williamson Tobacco Corp. ,the U.S.Supreme Court held that:

Accepted Answer

A) interdependent pricing of an oligopoly can form the basis of a primary-line injury claim. 
B) Brown had a reasonable prospect of recovering its losses from below-cost pricing through slowing the growth of generics. 
C) Brown had a reasonable prospect of recouping its predatory losses and could inflict the injury to competition the antitrust laws prohibit. 
D) Brown's alleged scheme was not likely to result in oligopolistic price coordination and sustained supracompetitive pricing in the generic segment of the national cigarette market. 
A) interdependent pricing of an oligopoly can form the basis of a primary-line injury claim. 
B) Brown had a reasonable prospect of recovering its losses from below-cost pricing through slowing the growth of generics. 
C) Brown had a reasonable prospect of recouping its predatory losses and could inflict the injury to competition the antitrust laws prohibit. 
D) Brown's alleged scheme was not likely to result in oligopolistic price coordination and sustained supracompetitive pricing in the generic segment of the national cigarette market.

Question 20

Vertical mergers directly result in an increase in concentration.

Accepted Answer

A) True 
 B)False

Exam 50: The Clayton Act, the Robinsonpatman Act, and Antitrust Exemptions and Immunities

Section 7 of the Clayton Act prohibits mergers where evidence indicates that the merger:

Huge,Inc.owns an east coast grocery chain.It has recently acquired a west coast grocery chain.This is an example of a:

If Acme Corp.and Bogus,Inc.both manufacture product X but no other products,the relevant product market for purposes of an antitrust challenge to a merger between Acme and Bogus will not be a crucial consideration.

The relevant geographic markets in the case of merger between competitors are the markets in which they actually compete.

Which of the following is a discount sometimes granted to buyers at various levels in a product's chain of distribution because of differences in the operations those buyers perform in the distribution system?

For ________,cost justification is the primary statutory defense to liability under Section 2(a)of the Robinson-Patman Act.

The Local Government Antitrust Act of 1984 eliminates damage actions against municipalities and their officers,agents,and employees for antitrust violations and makes injunctive relief the sole remedy in such cases.

In a Clayton Act Section 7-based challenge to a merger,the court's adoption of a broad relevant market definition will usually enhance the government's or private plaintiff's difficulty in demonstrating the challenged merger's probable anticompetitive effect.

In the European Union (EU),the European Commission has considerable authority to quash a merger through its own action.

The Federal Trade Commission (FTC)has the power to enforce the Clayton Act through:

In reference to Section 8 of the Clayton Act,what does the term interlock mean?

Historically,courts seeking to determine the legality of vertical mergers have first tended to look at:

Under the Clayton Act,private parties may sue for ________ if they are injured or threatened with injury by another party's violation of the statute.

In the case in the text,Brooke Group Ltd.V.Brown Williamson Tobacco Corp. ,the U.S.Supreme Court held that:

Vertical mergers directly result in an increase in concentration.

The Nature of Law

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Business and the Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Criminal Law and Procedure

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Unfair Competition

Introduction to Contracts

The Agreement: Offer

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Consideration

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Formation and Terms of Sales Contracts

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Personal Property and Bailments

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Introduction to Credit and Secured Transactions

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