Exam 47: Antitrust Law

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

A suit is filed against Urbana Corporation, alleging that the firm committed the offense of monopolization. To determine whether Urbana has monopoly power requires looking at

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, however. 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 contracts be held illegal

A contract under which a seller forbids a buyer to purchase products from the seller's competitors is a tying arrangement.

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

Any action challenged as an attempt to monopolize must have been specifically intended to exclude competitors and garner monopoly power.

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

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

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

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

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

Any agreement among competitors to fix prices constitutes a per se violation of antitrust law.

For products that are sold nationwide, there are no geographic boundaries for the market.

A firm may be a monopolist even though it is not the sole seller in a market.

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

Monopsony power is market power on the buy side of a market.

USA Cellphone Corporation requires all distributors of its products to sell the products at specified minimum prices. This resale price maintenance agreement is

Any conspiracy-even if it occurs outside the United States-that has a substantial effect on U.S. commerce is within the reach of the U.S. antitrust laws.

Seaside Cannery, Inc., is one of many producers of canned seafood. Seaside refuses to sell its products to Port Harbor Restaurant Corporation. Under antitrust law, this refusal is most likely

When a small number of companies share a large part of a market, the market is concentrated.