Question 1

A large drug company has recently started a promotional deal.This deal involves discounts to pharmacies for buying its drugs.The discounts are linked to the total dollar amount purchased.This deal also provides for restaurant vouchers for representatives of the pharmacies who are among the top ten buyers of the company's drugs.Which of the following laws is this deal most likely to violate?

Accepted Answer

A) Section 7 of the Clayton Act 
B) The Robinson-Patman Act 
C) Section 2 of the Sherman Act 
D) The Hart-Scott-Rodino Antitrust Improvement Act

Question 2

The Robinson-Patman Act prohibits sellers from making discriminatory payments to competing customers for such customer-performed services as advertising and promotional activities.

Accepted Answer

A) True 
 B)False

Question 3

In determining if a merger is anticompetitive,courts will look at the area that will have effects that are direct and immediate.What is the term for this analysis?

Accepted Answer

A) Relevant geographic market 
B) International risks test 
C) Irrelevant geographic means 
D) Domestic risk analysis

Question 4

Big Corp.(BC)operated in all 50 states.In all of the states except Oregon,BC was the dominant firm in its industry.Small Corp.(SC)operated only in Oregon,but was the dominant firm in that state.BC decided it wanted to destroy SC so that it would become dominant in Oregon.BC cut its prices and sold below cost in Oregon,while maintaining regular prices everywhere else.This is an example of:

Accepted Answer

A) first-line price discrimination. 
B) secondary level price discrimination. 
C) tertiary level price discrimination. 
D) super-tertiary level price discrimination.

Question 5

Stitchwell is an apparel manufacturer.Huge Mart,a wholesale dealer,is its largest customer.Huge Mart also owns Gorgeous,a department store chain that deals in apparels,shoes,and accessories.Stitchwell routinely offers "wholesaler special" discounts to Huge Mart and other wholesalers.Are these discounts illegal?

Accepted Answer

A) Yes,these discounts are per se illegal under Section 2(
A) of the Robinson-Patman Act. 
B) No,these discounts are not illegal because Stitchwell can legally set resale prices. 
C) Yes,these discounts will be deemed illegal if Huge Mart passes them on to Gorgeous customers. 
D) No,these discounts are not illegal considering they are provided only for wholesalers.

Question 6

According to the Clayton Act,labor unions and their activities can be construed as illegal.

Accepted Answer

A) True 
 B)False

Question 7

Proof of ________ is often offered as evidence of a seller's anticompetitive intent when proving a primary level violation of the Robinson-Patman Act.

Accepted Answer

A) functional discounts 
B) predatory pricing 
C) quantity discounts 
D) accumulation pricing

Question 8

________ determinations under the Clayton Act have traditionally employed functional interchangeability tests similar to those employed in relevant product market determinations under the Sherman Act.

Accepted Answer

A) Line of commerce 
B) International risk 
C) Irrelevant geographic means 
D) Domestic risk analysis

Question 9

The Clayton Act exempts the formation and collective marketing activities of ________ from antitrust liability.

Accepted Answer

A) funeral homes and services 
B) roofers and shingle manufactures 
C) agricultural cooperatives 
D) wireless phone services

Question 10

Minisculea,a small nation that exists on a Pacific Ocean island,is a major producer and seller of a substance known as XYZ.Minisculea is also the leader of a cartel of other XYZ producers.The cartel has raised XYZ prices,a fact of significant concern to the United States,given the many strategic uses to which XYZ can be put.U.S.officials have engaged in ongoing discussions with Minisculea about this subject.If Minisculea and the other cartel members are sued in a U.S.court for allegedly violating the U.S.antitrust acts by fixing the price at which they sold XYZ to U.S.customers,their best defense would be:

Accepted Answer

A) the state action doctrine. 
B) the sovereign compulsion doctrine. 
C) the doctrine of sovereign immunity. 
D) the act of state doctrine.

Question 11

________ attempts to bar mergers that may have an anticompetitive effect.

Accepted Answer

A) Section 7 of the Clayton Act 
B) Section 2 of the Sherman Act 
C) Section 3 of the Clayton Act 
D) Section 1 of the Sherman Act

Question 12

Strong Corp.and Marginal,Inc.are competitors.Strong plans to acquire ownership of Marginal.Which of the following,if true,would help bolster a conclusion that the acquisition is lawful under Section 7 of the Clayton Act?

Accepted Answer

A) That the industry in which Strong and Marginal are competitors has become increasingly concentrated in recent years. 
B) That Strong has a history of acquiring ownership over competitors to increase its market share. 
C) That Strong has a 35 percent market share now and would only be increasing its market share by another 10 percent by acquiring Marginal. 
D) That Marginal is teetering on the brink of bankruptcy and only Strong is interested in purchasing Marginal.

Question 13

Section 8 of the Clayton Act requires a ________ standard of liability.

Accepted Answer

A) quick-look 
B) per se 
C) secondary 
D) rule of reason

Question 14

Zenith Co.is a company that manufactures cloth.It purchases the cotton required as raw material from Yell Mart.Zenith Co.acquires Yell Mart.Identify the type of merger.

Accepted Answer

A) Vertical merger 
B) Horizontal merger 
C) Conglomerate merger 
D) Symmetrical merger

Question 15

Which of the following is most likely to violate Section 2(a)of the Robinson-Patman Act?

Accepted Answer

A) Refusing to sell except at a discriminatory price 
B) Price discrimination for sales to different purchasers made at the same time 
C) Discriminating between customers when quoting prices 
D) Price discrimination in consignment transactions

Question 16

Bob is on the board of directors of both Acme Corporation and Beta Corporation.Acme recently acquired Teen Co. ,a retailer of teen girls' clothing.Beta Corporation previously acquired Limitless Co. ,another retailer of teen girls' clothing.Except the teen girls' clothing business,Acme and Beta do not have any other competing businesses.Under the Antitrust Amendments of 1990:

Accepted Answer

A) Bob must resign from the board of directors of both Acme and Beta. 
B) Bob must resign from the board of directors of Acme. 
C) Bob need not resign from either board of directors if the teen girls' clothing business contributes minimally to either organization's sales. 
D) Bob need not resign until a competitor of Limitless and Teen Co.successfully challenges Acme's acquisition.

Question 17

The McCarran-Ferguson Act does not exempt all actions by insurance companies from antitrust liability.

Accepted Answer

A) True 
 B)False

Question 18

Section 8 of the Clayton Act,as modified by the Antitrust Amendments Act of 1990,prohibits the same individuals from controlling competing corporations when those individuals are:

Accepted Answer

A) shareholders. 
B) directors or senior officers. 
C) mid-level officers. 
D) managerial employees.

Question 19

Contracts where buyers agree to purchase all of their requirements for a commodity from one seller are examples of which type of agreement?

Accepted Answer

A) Price fixing agreement 
B) Tying agreement 
C) Exclusive dealing agreement 
D) Market sharing agreement

Question 20

Acme Co. ,a widget manufacturer,is acquiring Basic,Inc. ,another widget manufacturer.In view of the nature of the widget industry,a manufacturer's sales territories tend to correspond closely to the states in which it has manufacturing plants.Both Acme and Basic have plants in North Carolina,South Carolina,Tennessee,and Kentucky.In addition,Acme has plants in Illinois and Indiana,and Basic has a plant in Ohio.The post-merger market share of the two firms is likely to be 5 percent in the combined North Carolina,South Carolina,Tennessee,Kentucky,Illinois,Indiana,and Ohio markets,10 percent in the combined North Carolina,South Carolina,Tennessee,and Kentucky markets,and 32 percent in the combined North Carolina-South Carolina market,where Acme and Basic have been historically strong competitors.Which of the above markets is likely to be treated as the relevant geographic market for purposes of determining the legality of the acquisition? Why that market?

Accepted Answer

The answer of Acme Co. ,a widget manufacturer,is acquiring Basic,Inc....

Exam 50: The Clayton Act, the Robinsonpatman Act, and Antitrust Exemptions and Immunities

The Robinson-Patman Act prohibits sellers from making discriminatory payments to competing customers for such customer-performed services as advertising and promotional activities.

In determining if a merger is anticompetitive,courts will look at the area that will have effects that are direct and immediate.What is the term for this analysis?

According to the Clayton Act,labor unions and their activities can be construed as illegal.

Proof of ________ is often offered as evidence of a seller's anticompetitive intent when proving a primary level violation of the Robinson-Patman Act.

________ determinations under the Clayton Act have traditionally employed functional interchangeability tests similar to those employed in relevant product market determinations under the Sherman Act.

The Clayton Act exempts the formation and collective marketing activities of ________ from antitrust liability.

________ attempts to bar mergers that may have an anticompetitive effect.

Strong Corp.and Marginal,Inc.are competitors.Strong plans to acquire ownership of Marginal.Which of the following,if true,would help bolster a conclusion that the acquisition is lawful under Section 7 of the Clayton Act?

Section 8 of the Clayton Act requires a ________ standard of liability.

Zenith Co.is a company that manufactures cloth.It purchases the cotton required as raw material from Yell Mart.Zenith Co.acquires Yell Mart.Identify the type of merger.

Which of the following is most likely to violate Section 2(a) of the Robinson-Patman Act?

The McCarran-Ferguson Act does not exempt all actions by insurance companies from antitrust liability.

Section 8 of the Clayton Act,as modified by the Antitrust Amendments Act of 1990,prohibits the same individuals from controlling competing corporations when those individuals are:

Contracts where buyers agree to purchase all of their requirements for a commodity from one seller are examples of which type of agreement?