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Exam 47: Antitrust Law

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Question 31

Multiple Choice

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Which analysis, if any, is applied to territorial and customer restrictions imposed by a manufacturer on a retailer?

A) Both territorial and customer restrictions are generally analyzed under the rule-of-reason test.
B) Both territorial and customer restrictions are generally analyzed on a per se basis.
C) Territorial restrictions are analyzed under the rule-of-reason test, while customer restrictions are analyzed on a per se basis.
D) Customer restrictions are analyzed under the rule-of-reason test, while territorial restrictions are analyzed on a per se basis.
E) Neither territorial nor customer restrictions are analyzed on any basis because both have been ruled legal in all cases.

F) B) and E)
G) D) and E)

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Question 32

Multiple Choice

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BigWheels, Inc. put all of their premium tires on sale at a severely discounted price. This put both competing tire companies out of business. BigWheels then sharply increased their prices. This is considered ________.

A) competitive pricing
B) predatory pricing
C) purposeful pricing
D) predominant pricing
E) preeminent pricing

F) A) and B)
G) A) and C)

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Question 33

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Carlitas Manufacturing is located in Mississippi. It does not have a place of business in Texas, but decides it would like to be in Texas. Carlitas buys CharlieHorse and continues to produce CharlieHorse's products. This type of mercer is known as a(n) ________.

Othellos requires that Poddelins buy all of its computers only from Othellos. This is known as a(n) ________

Which of the following is true regarding the legality of Katie's arrangement that if a store carries her line of scuba gear, it must also carry her line of wet suits?

Contrast traditional antitrust theories with the Chicago School theories.

Xander's owns 70 percent of the market share for aluminum tennis racquets. Under Section 2 of the Sherman Act this is considered

Phillipo's Distribution sells the exact same gadget to two different buyers; however one buyer gets a very discounted price. This is considered:

PWP Guitars, a popular market leader in the guitar manufacturing industry, has secured agreements with the two largest musical instrument dealers in America to sell only PWP guitars in their stores and not buy from their competition. Three of their competitors have filed suit as plaintiffs, alleging that this agreement prevents people from buying their products, and thus lessens competition and creates a monopoly. What specific violation would the plaintiffs claim is occurring?

Any anticompetitive behavior not prohibited under the Sherman Act or the Clayton Act is permissible under federal law.

[Scuba Gear] Katie is a popular manufacturer of scuba gear. Before she allows a store to carry her line of scuba gear, she requires that the store owner agree that her line is the only line of scuba gear the store will carry. She also requires that if a store carries her line of scuba gear, it must also carry her line of wet suits. Sales of other manufacturer's gear and wet suits have begun a steady decline. Katie is accused of violating antitrust laws. However, Katie replies that she is simply conducting good business practices. Lara, the president of Deep Blue Scuba, calls Katie and tells her that she is prepared to bring suit against Katie for antitrust violations. Katie tells Lara that although she is not in violation, only the government could take action against her, and the government is way too busy to get involved in a dispute over scuba gear. -Katie says that her agreements with sellers that ask the sellers to carry only her scuba gear are good and legal business practices. Which of the following is true regarding her statement?

Sarita and her friend Jonah both own flower shops. Their shops are in adjoining towns located approximately 10 miles apart. Sarita agrees that she will not sell flowers for delivery in Jonah's town in return for Jonah agreeing that he will not sell flowers for delivery in Sarita's town. Have Sarita and Jonah committed any antitrust violation? If so, what is the violation and under what standard would it be reviewed?

The practices enumerated in the Clayton Act are considered illegal when they do what?

Per se violations cannot provide guidance to businesses as to what are acceptable and unacceptable business practices.

An inquiry into the competitive effects of a company's behavior to determine whether the benefits of the behavior outweigh the harm of the anticompetitive behavior is known as which of the following?

Archer Deborian and Bullarian Portans are working to get the best price for their aluminum. Both are the leading aluminum dealers in the world and control market prices by collaborating to set prices for their aluminum. What type of Sherman Act violation would this be?

Assume in the previous question that PWP Guitars also has a clause in the contract that further requires any dealers who buy their guitars must also buy their guitar amplifiers. If this is found to be true, what additional violation might PWP guitars be found guilty of committing?

Which of the following is true regarding Mateo's claim that he could not have a monopoly because Robyn was also operating a tour service?

[Adult Floaters] Adam and Zach are both involved in businesses that manufacture bathing suits with small personal flotation devices implanted to assist with swimming. They both ship the suits to different states around the country. Adam and Zach get together and decide to raise their prices. They decide that since they are the only two manufacturers of this type of suit, if they both stick together and raise prices to an agreed upon amount, then consumers will be forced to pay that amount. They want to make a lot of money before anyone else jumps into the market. Adam's disgruntled secretary finds out about the agreement and sends out letters to consumers revealing the agreement. -In attempting to establish a violation of the Sherman Act, what type of trade violation would the government most likely allege?

Valmar has been accused of being a monopoly in the car radio industry because it controls so much of the market value. To determine whether or not Valmar truly is a monopoly, what must a court look at first?