Question 1

Dairy Cream Inc.makes and sells ice cream.Dairy Cream wants to merge with EZ Freeze Inc. ,its main competitor and a maker of ice cream and other frozen desserts.In a challenge to the deal on a charge of monopolization,the relevant product market includes ice cream and

Accepted Answer

A)  no other products. 
B)  products that are related,such as cake. 
C)  products that have identical attributes,such as frozen yogurt. 
D)  products that must be kept cold,such as frozen fruit.

Question 2

Fertile Acres Inc. ,Growers Farm Co-op,and Harvest Orchards agree to exchange information,conduct an advertising campaign,and set certain regulatory standards to govern their operations.This association is

Accepted Answer

A)  a deal 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 3

Four grocery stores account for 80 percent of the retail food sales in Metro City.Two of the stores want to merge.In determining whether the merger violates the Clayton Act,the most crucial factor is

Accepted Answer

A)  the market shares of the firms in their market. 
B)  the market value of the firms' shares in the stock market. 
C)  the comparative value of each store in a market for their sale. 
D)  the total value of the market in relation to the stock for sale in the stores.

Question 4

Cosmétique Inc.makes and sells cosmetics and related products.By selling its goods at prices substantially below the normal cost of production,the firm hopes to drive its competitors from the market.This is

Accepted Answer

A)  market power pricing. 
B)  predatory pricing. 
C)  price discrimination. 
D)  price-fixing.

Question 5

To reduce marketing costs and raise prices,competitors can divide up marketing territories or customers without violating antitrust law.

Accepted Answer

A) True 
 B)False

Question 6

The power to control the market price of a product is market power.

Accepted Answer

A) True 
 B)False

Question 7

With respect to anticompetitive behavior,the Federal Trade Commission Act prohibits

Accepted Answer

A)  civil violations of the Sherman Act. 
B)  criminal violations of the Clayton Act. 
C)  all forms not covered under other federal antitrust laws. 
D)  only forms covered under other federal antitrust laws.

Question 8

Because commerce operates more efficiently when competitors cooperate,Section 1 of the Sherman Act permits rivals to consolidate market power.

Accepted Answer

A) True 
 B)False

Question 9

Road Tires Inc.conditions the sale of its products to Service Stores on the buyer's agreement to buy Road's tire-repair kits.Under the Clayton Act,this deal is

Accepted Answer

A)  a per se violation. 
B)  a violation,unless the seller's competitors make similar deals. 
C)  a violation,depending on its purpose and the effect on competition. 
D)  not a violation.

Question 10

Oil Industries Inc.and Petro Corporation are competing refineries situated on the Gulf coast.The two firms cooperate to obtain federal funds to build a levee that could protect their facilities from rising sea levels.With respect to antitrust law,this effort is

Accepted Answer

A)  a violation because it is "objectively baseless." 
B)  a violation because funds will be spent for an anticompetitive purpose. 
C)  a violation because it involves a conspiracy to affect market power. 
D)  exempt from antitrust enforcement.

Question 11

Precision Parts Corporation and Aligned Gears,Inc.are competitors selling certain machine parts that are otherwise generally unattainable in their geographic market.This market includes the states of Minnesota,North Dakota,and South Dakota.Precision Parts and Aligned Gears agree that Precision Parts will no longer sell in Minnesota and that Aligned Gears will no longer sell in North and South Dakota.Have Precision Parts and Aligned Gears violated any antitrust law? If so,which one? Explain.If they had divided their market by type of customer rather than geographic area,would the result be the same? Why or why not?

Accepted Answer

The answer of Precision Parts Corporation and Aligned Gears,Inc.are competitors...

Question 12

The Medical Device Makers Association does not include all manufacturers of medical and surgical instruments.The association refuses to deal with any parties who do not carry the products of its members.This is

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 13

With respect to antitrust violations,the Federal Trade Commission does not enforce

Accepted Answer

A)  the Federal Trade Commission Act. 
B)  the Clayton Act. 
C)  the Sherman Act. 
D)  any of the federal antitrust laws.

Question 14

A firm may be deemed a monopolist,even though it is not the only seller in a market,because what matters is size in relation to the market.

Accepted Answer

A) True 
 B)False

Question 15

Best View Corporation offers to sell LED screens to Computer & Video,Inc. ,only if the buyer also agrees to buy the seller's servicing of its products.This is

Accepted Answer

A)  an exclusive-dealing contract. 
B)  a tying arrangement. 
C)  price discrimination. 
D)  business acumen.

Question 16

The legality of a tying arrangement depends in part on the agreement's likely effect on competition in the relevant markets.

Accepted Answer

A) True 
 B)False

Question 17

Only the Federal Trade Commission can enforce the Clayton Act.

Accepted Answer

A) True 
 B)False

Question 18

Antitrust legislation is based on a desire to limit economic competition.

Accepted Answer

A) True 
 B)False

Question 19

Snowboards Inc.refuses to sell its products to Timber Winter Sports Stores,Inc. ,a retail snowboard dealership.This violates Section 2 of the Sherman Act if Snowboards has monopoly power and

Accepted Answer

A)  none of the choices. 
B)  Timber has or is likely to acquire monopoly power. 
C)  the refusal is unilateral. 
D)  the refusal has an anticompetitive effect on the market.

Question 20

An antitrust action is brought against Carrier Freight Company,alleging that a certain act constitutes the offense of attempted monopolization.To qualify,the act must

Accepted Answer

A)  be likely to succeed. 
B)  be unlikely to succeed. 
C)  succeed. 
D)  fail.

Exam 24: Antitrust Law and Promoting Competition

Dairy Cream Inc.makes and sells ice cream.Dairy Cream wants to merge with EZ Freeze Inc. ,its main competitor and a maker of ice cream and other frozen desserts.In a challenge to the deal on a charge of monopolization,the relevant product market includes ice cream and

Fertile Acres Inc. ,Growers Farm Co-op,and Harvest Orchards agree to exchange information,conduct an advertising campaign,and set certain regulatory standards to govern their operations.This association is

Four grocery stores account for 80 percent of the retail food sales in Metro City.Two of the stores want to merge.In determining whether the merger violates the Clayton Act,the most crucial factor is

Cosmétique Inc.makes and sells cosmetics and related products.By selling its goods at prices substantially below the normal cost of production,the firm hopes to drive its competitors from the market.This is

To reduce marketing costs and raise prices,competitors can divide up marketing territories or customers without violating antitrust law.

The power to control the market price of a product is market power.

With respect to anticompetitive behavior,the Federal Trade Commission Act prohibits

Because commerce operates more efficiently when competitors cooperate,Section 1 of the Sherman Act permits rivals to consolidate market power.

Road Tires Inc.conditions the sale of its products to Service Stores on the buyer's agreement to buy Road's tire-repair kits.Under the Clayton Act,this deal is

Oil Industries Inc.and Petro Corporation are competing refineries situated on the Gulf coast.The two firms cooperate to obtain federal funds to build a levee that could protect their facilities from rising sea levels.With respect to antitrust law,this effort is

The Medical Device Makers Association does not include all manufacturers of medical and surgical instruments.The association refuses to deal with any parties who do not carry the products of its members.This is

With respect to antitrust violations,the Federal Trade Commission does not enforce

A firm may be deemed a monopolist,even though it is not the only seller in a market,because what matters is size in relation to the market.

Best View Corporation offers to sell LED screens to Computer & Video,Inc. ,only if the buyer also agrees to buy the seller's servicing of its products.This is

The legality of a tying arrangement depends in part on the agreement's likely effect on competition in the relevant markets.

Only the Federal Trade Commission can enforce the Clayton Act.

Antitrust legislation is based on a desire to limit economic competition.

Snowboards Inc.refuses to sell its products to Timber Winter Sports Stores,Inc. ,a retail snowboard dealership.This violates Section 2 of the Sherman Act if Snowboards has monopoly power and

An antitrust action is brought against Carrier Freight Company,alleging that a certain act constitutes the offense of attempted monopolization.To qualify,the act must