Question 1

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

Accepted Answer

A)  price-fixing. 
B)  smart marketing. 
C)  predatory pricing. 
D)  price discrimination.

Question 2

Price-fixing agreements are considered violations of the Sherman Act because of their real and potential adverse effects on open and free competition.

Accepted Answer

A) True 
 B)False

Question 3

Baby Goods Inc.buys Child Shops Inc.in an attempt to gain monopoly power.Remedies that a court might impose in a suit against Baby Goods for a violation of the antitrust laws include

Accepted Answer

A)  divesting itself of the control or ownership of Child Shops. 
B)  funding new entries to the relevant market. 
C)  all of the choices. 
D)  using its market power to encourage increased competition.

Question 4

Under the Clayton Act,a seller can condition the sale of a product on the buyer's promise not to deal in the goods of the seller's competitors.

Accepted Answer

A) True 
 B)False

Question 5

A market in which there is a single seller or a very limited number of sellers is a monopoly.

Accepted Answer

A) True 
 B)False

Question 6

A price-fixing agreement or other anticompetitive agreement to control a portion of U.S.markets cannot be held to be a per se violation of the antitrust laws if the agreement involves a foreign firm.

Accepted Answer

A) True 
 B)False

Question 7

Online Media Inc.bundles its products so that consumers are forced to pay for access to some sites that they do not want in order to obtain access to sites that they do want.A court will likely rule that the bundling does not violate the rule of reason if it

Accepted Answer

A)  is the most restrictive means for the firm to achieve its purpose. 
B)  is fully within the firm's ability to achieve. 
C)  does not injure competition. 
D)  suppresses or destroys competition.

Question 8

Any conspiracy that has a substantial effect on U.S.commerce is within the scope of the Sherman Act,unless it occurs outside the United States.

Accepted Answer

A) True 
 B)False

Question 9

If the legitimate benefits outweigh the anticompetitive effects of a resale price maintenance agreement,the agreement may be held lawful.

Accepted Answer

A) True 
 B)False

Question 10

Edibles Inc.and Food Stuff Corporation are competitors.Each firm has capital,surplus,and undivided profits in excess of $40 million and competitive sales of more than $5 million.Gina and Hal serve as directors on both firms' boards.Under the Clayton Act's restriction concerning interlocking directorates,Gina and Hal are

Accepted Answer

A)  liable for failing to comply. 
B)  not liable because the firms are likely to continue to compete. 
C)  not liable because the firms' officers conduct the competitive activities. 
D)  not liable because the firms' shareholders can affect company policies.

Question 11

The federal agencies that enforce the antitrust laws include

Accepted Answer

A)  the U.S.Department of Justice. 
B)  the Securities and Exchange Commission. 
C)  the Consumer Financial Protection Bureau. 
D)  all of the choices.

Question 12

Ranch Supplies Company believes that its chief competitor Stock & Equipment Inc.engages in anticompetitive behavior in an attempt to drive Ranch Supplies out of the market.Under the Clayton Act,Ranch Supplies can sue Stock & Equipment for a violation of

Accepted Answer

A)  none of the choices. 
B)  the Clayton Act only. 
C)  any of the federal antirust laws. 
D)  the Sherman Act only.

Question 13

The chief executive officers of the major U.S.steel makers would most likely be prosecuted under the antitrust laws if they

Accepted Answer

A)  met to review developments in the domestic market for steel. 
B)  agreed to work together to control the price of domestic steel. 
C)  conferred on resource,supply,and distribution issues. 
D)  promised to reveal to each other their positions on trade and tariffs.

Question 14

Components Inc. ,a maker of vehicle parts,refuses to sell to DIY Repair Inc. ,a national vehicle service firm.The maker convinces Engine Parts Company,a competitor,to do the same.This is

Accepted Answer

A)  a group boycott. 
B)  a tying arrangement. 
C)  a trade association. 
D)  a market division.

Question 15

Under the Clayton Act,a business firm cannot merge with another unless the effect is to substantially lessen competition.

Accepted Answer

A) True 
 B)False

Question 16

To deem an agreement a per se violation of antitrust law,a court must determine whether the agreement actually constitutes a restraint on trade.

Accepted Answer

A) True 
 B)False

Question 17

Fish Purveyors Corporation and Gill Netters Inc.are the principal suppliers of crustaceans in their market.They agree that Fish Purveyors will sell exclusively to retailers and Gill Netters will sell exclusively to wholesalers.This is most likely

Accepted Answer

A)  a situation that neither restrains trade nor harms competition. 
B)  not within the scope of the Sherman Act. 
C)  a per se violation of antitrust law. 
D)  subject to analysis under the rule of reason.

Question 18

Proving an antitrust violation requires showing a misuse of market power.

Accepted Answer

A) True 
 B)False

Question 19

Power Inc.and QualGas Corporation refine and sell natural gas.To limit the supply on the market and thereby raise prices,Power and QualGas agree to buy "excess" supplies from dealers and "dispose" of it.This is

Accepted Answer

A)  a deal that neither restrains trade or harms competition. 
B)  not within the scope of the Sherman Act. 
C)  a per se violation of the Sherman Act. 
D)  subject to analysis under the rule of reason.

Question 20

When applying the rule of reason to an activity that allegedly violates the antitrust laws,a court will not consider

Accepted Answer

A)  the purpose of the agreement. 
B)  the parties' market ability to implement the agreement. 
C)  whether the agreement is a per se violation. 
D)  the potential effect of the agreement on competition.

Exam 24: Antitrust Law and Promoting Competition

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

Price-fixing agreements are considered violations of the Sherman Act because of their real and potential adverse effects on open and free competition.

Baby Goods Inc.buys Child Shops Inc.in an attempt to gain monopoly power.Remedies that a court might impose in a suit against Baby Goods for a violation of the antitrust laws include

Under the Clayton Act,a seller can condition the sale of a product on the buyer's promise not to deal in the goods of the seller's competitors.

A market in which there is a single seller or a very limited number of sellers is a monopoly.

A price-fixing agreement or other anticompetitive agreement to control a portion of U.S.markets cannot be held to be a per se violation of the antitrust laws if the agreement involves a foreign firm.

Online Media Inc.bundles its products so that consumers are forced to pay for access to some sites that they do not want in order to obtain access to sites that they do want.A court will likely rule that the bundling does not violate the rule of reason if it

Any conspiracy that has a substantial effect on U.S.commerce is within the scope of the Sherman Act,unless it occurs outside the United States.

If the legitimate benefits outweigh the anticompetitive effects of a resale price maintenance agreement,the agreement may be held lawful.

The federal agencies that enforce the antitrust laws include

Ranch Supplies Company believes that its chief competitor Stock & Equipment Inc.engages in anticompetitive behavior in an attempt to drive Ranch Supplies out of the market.Under the Clayton Act,Ranch Supplies can sue Stock & Equipment for a violation of

The chief executive officers of the major U.S.steel makers would most likely be prosecuted under the antitrust laws if they

Components Inc. ,a maker of vehicle parts,refuses to sell to DIY Repair Inc. ,a national vehicle service firm.The maker convinces Engine Parts Company,a competitor,to do the same.This is

Under the Clayton Act,a business firm cannot merge with another unless the effect is to substantially lessen competition.

To deem an agreement a per se violation of antitrust law,a court must determine whether the agreement actually constitutes a restraint on trade.

Fish Purveyors Corporation and Gill Netters Inc.are the principal suppliers of crustaceans in their market.They agree that Fish Purveyors will sell exclusively to retailers and Gill Netters will sell exclusively to wholesalers.This is most likely

Proving an antitrust violation requires showing a misuse of market power.

Power Inc.and QualGas Corporation refine and sell natural gas.To limit the supply on the market and thereby raise prices,Power and QualGas agree to buy "excess" supplies from dealers and "dispose" of it.This is

When applying the rule of reason to an activity that allegedly violates the antitrust laws,a court will not consider