Chapter 45 Flashcards
When faced with the difficult problem of deciding what kinds of joint actions amounted to a restraint of trade, the courts concluded that some kinds of behavior always have a negative effect on competition and can never be excused or justified. These kind of acts are classed as per se illegal.
true or false
true
Direct price discrimination is prohibited under which of the following pieces of legislation?
Multiple Choice
Robinson-Patman Act
Truth in Pricing Act
Federal Price Discrimination Act
Sherman Act
Robinson-Patman Act
Under Section 1 of the Sherman Act, a single firm may not lawfully refuse to deal with certain firms or agree to deal only on certain terms.
true or false
false
Section 2 of the Sherman Act does not outlaw monopolies.
true or false
true
Section 1 of the Sherman Act applies to _____.
Multiple Choice
mergers
unilateral actions
joint actions
non-import trade
joint actions
Attempts by competitors to interfere with the market and control prices are called:
Multiple Choice
legal as free market activities.
horizontal price fixing.
lateral price fixing.
vertical price fixing.
horizontal price fixing.
The Noerr Doctrine prohibits people and businesses from joining together and lobbying governmental officials.
true or false
false
Which of the following is true regarding vertical price-fixing?
Multiple Choice
It is illegal per se for manufacturers to state a “suggested retail price” for their products.
It is an attempt by manufacturers to control the resale price of their products.
It is not within the scope of Section 1 of the Sherman Act.
It is an attempt by competitors to interfere with the market and control prices.
It is an attempt by manufacturers to control the resale price of their products.
Attempts by competitors to interfere with the market and control prices are called parallel price-fixing and are illegal per se under Section 1 of the Sherman Act.
true or false
false
Horizontal price fixing is also called resale price maintenance.
true or false
false
In regard to Section 1 of the Sherman Act, any anticompetitive behavior that has not been classified as a per se violation is judged under the rational basis analysis.
true or false
false
Which of the following is true regarding treatment under the Clayton Act of exclusive dealing contracts and requirements contracts?
Multiple Choice
An exclusive dealing contract is treated like a tie-in contract, with the courts looking at the dollar amount of commerce foreclosed from competition in order to determine legality; and in regard to a requirements contract, courts look at the percentage share of the relevant market foreclosed to competition by the contract.
Both types of contracts are considered per se violations of the Clayton Act.
Both types of contracts are treated like tie-in contracts, with the courts looking at the dollar amount of commerce foreclosed from competition in order to determine legality.
In determining the legality of both an exclusive dealing contract and a requirements contract, courts look at the percentage share of the relevant market foreclosed to competition by the contract.
In determining the legality of both an exclusive dealing contract and a requirements contract, courts look at the percentage share of the relevant market foreclosed to competition by the contract.
What type of merger occurs when a firm acquires a captive market for its products or a captive supplier of a product it regularly buys, thus operating on more than one competitive level?
Multiple Choice
Vertical merger
Conglomerate merger
Horizontal merger
Passive merger
Vertical merger
ABC Company and XYZ Company, who had traditionally been competitors, entered into a joint venture to research and develop a new drug. If antitrust activity is alleged, which of the following is true regarding review of that activity?
Multiple Choice
Under the Sherman Act, the joint venture is a per se violation.
Under the National Cooperative Research and Production Act, the joint venture will be reviewed under a rule of reason analysis.
Under the Robinson-Patman Act, the joint venture will be considered legal and not subject to review.
Under the Clayton Act, the joint venture will be reviewed under an abbreviated rule of reason analysis.
Under the National Cooperative Research and Production Act, the joint venture will be reviewed under a rule of reason analysis.
ABC Wholesaler sells soda to grocery stores. ABC was charged with a violation of the Robinson-Patman Act for selling soda to XYZ Grocery cheaper than it sold soda to other grocers. ABC defended on the basis that it was forced to sell at a cheaper price to XYZ Grocery because ABC’s out-of-state competitor had lawfully offered to sell soda to XYZ Grocery at the cheaper price. Assuming the out-of-state seller had lawfully offered the lower price to XYZ Grocery, which of the following is true regarding ABC’s defensive position?
Multiple Choice
Regardless of the action on the part of the out-of-state competitor, ABC has not violated the Robinson-Patman Act because price discrimination is lawful in regard to consumer items.
ABC may offer XYZ Grocery the lower price because XYZ was offered a lawful, lower price by one of ABC’s competitors.
Regardless of the action on the part of the out-of-state competitor, ABC has not violated the Robinson-Patman Act because price discrimination is lawful in regard to food and drink items.
Regardless of the action on the part of the out-of-state competitor, ABC may not engage in price discrimination and has violated the Robinson-Patman Act.
ABC may offer XYZ Grocery the lower price because XYZ was offered a lawful, lower price by one of ABC’s competitors.
