Exam 47: Antitrust Law

Joint ventures undertaken by competitors are not subject to antitrust laws.

Lightning Cycles,Inc.,makes Lightning-brand motorcycles and accessories,which are distributed to authorized dealers,including Macho Motors,Inc.Macho operates dealerships in several locations.Lightning imposes territorial restrictions on Macho to insulate other dealers from direct competition.This is

Engine Components,Inc.,a manufacturer of vehicle parts,refuses to sell to Fix-It,Inc.,a national vehicle service firm.Engine Components convinces Greasy Motor Parts Company,a competitor,to do the same.This is

Mango Corporation believes that Melon Corporation engages in anticom?peti?tive behavior in an attempt to drive Mango,its chief competitor,out of the market.Antitrust laws can be enforced against Melon by

Java Bean Company imports coffee beans and sells them under two-year contracts to Mellow Roast,Inc.,and other coffeemakers.The contracts require that during the two-year term a coffeemaker not buy beans from Java Bean's competitors.The contracts do not limit the coffeemakers' purchase of tea or other beverage ingredients from other suppliers,how?ever.In the second year of the contract,Mellow Roast protests that this arrangement violates antitrust law.Is Mellow Roast correct? If not,why not? If so,under which antitrust statute,or statutes,could these con?tracts be held illegal?

A suit is filed against Urbana Corporation,alleging that the firm commit?ted the offense of monopolization.To determine whether Urbana has mo?nopoly power requires looking at

Midwest Agri-Products Corporation offers to sell its sugar substitute to Nice Candies,Inc.,only if Nice Candies agrees to buy all the corn it needs from Midwest Agri-Products,even though there are other corn sellers from whom Nice Candies could buy.This is

Only the U.S.Department of Justice can prosecute violations of all of the antitrust laws.

To prevent its competitors from obtaining sufficient supplies to make their products,Molded Plastics,Inc.,uses its market power to increase the prices of those supplies.This is

Health Resources Corporation makes and sells Intake,the most prescribed name-brand cholesterol-lowering medication.Jenerica Company has the potential to make a generic version of the same drug.Health Resources pays Jenerica not to sell its product.This is

An antitrust action is brought against Tri-State Transport Company,al?leging the offense of attempted monopolization.To be guilty of this of?fense,Tri-State's attempt must have

Resale price maintenance agreements are subject to analysis under the rule of reason.

By contract,Quality Metals Corporation forbids Resource Refining,Inc.,a wholesale buyer of Quality's products,from purchasing the products of Quality's competitors.This exclusive-dealing contract is allowed

Rally Speedboat Corporation refuses to sell its products to Super Weekends,Inc.,a recreational water products dealership.This is

To drive its competitors out of a certain geographic segment of its market,Fryin' Potatoes,Inc.,sets the prices of its products below cost for the buyers in that area.This is

Imperio Caffeine Corporation makes and sells coffee under a variety of brand names.Imperio wants to merge with Java Company,its main competitor.In weighing a challenge to the deal,a court looks at the relevant product market.This most likely includes coffee and

Price discrimination occurs when a seller charges the same price to competing buyers for identical goods or services.

Finely Engineered Parts Corporation (FEPC)and Great Gears & Gauges,Inc.(3G),are competitors selling certain machine parts that are otherwise generally unattainable in their geographic market.This market includes the states of California,Oregon,Washington,and Idaho.FEPC and 3G agree that FEPC will no longer sell in California and that 3G will no longer sell in Oregon,Washington,and Idaho.Have FEPC and 3G violated any antitrust law? If so,which one? Explain.If they had divided their market by type of customer rather than geographic are,would the result be the same? Why or why not?

To acquire monopoly power in its market,Pure Plastics,Inc.,sets its prices substantially below the normal costs of production.Under antitrust law,this is

A horizontal restraint of trade results from an agreement between firms at different levels in the manu?facturing and distribution process.