Exam 47: Antitrust Law

Integrated Software, Inc., conditions the sale of one of its products on Inventory Office System's agreeing to buy another of Integrated's products. This deal is

Mergers between firms that compete in the same market are vertical mergers.

North Mining Company and South Excavation Company agree to abide by the decisions of East Coast Financial Corporation as to their respective levels of production, markets, and prices, effectively reducing competition and increasing profits. This is most likely

Helio Company can process hydrogen into an inexpensive fuel for internal combustion engines. As an innovator in its market, Helio currently has the power to affect the price of its product. This is

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

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

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

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

Territorial and customer restrictions are currently considered per se violations of antitrust law.

Delta Services, Inc., is the major wholesale distributor of software in the state of Florida. Its closest competitor is Efficient Systems Company, another Florida firm. The two firms agree that Delta will operate in south Florida and Efficient will operate in north Florida. This is

Unilateral conduct can not result in a violation of antitrust law.

Most group boycotts are legal.

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

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

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

Under the rule of reason, a court will consider the effect or the potential effect of a business agreement on competition.

International Products, Inc. (ICI), has exclusive control over the market for its product. ICI's market power is most likely

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

In a situation involving a price-fixing agreement, normally each competitor is liable for the total amount of any damages.