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Exam 47: Antitrust Law

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Question 1

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What does a judge consider when conducting a rule-of-reason analysis?

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When engaging in rule-of-reason analysis, a judge considers the following: (1) the nature and purpose of the restraint on trade, (2) the scope of the restraint, (3) the effect of the restraint on business and competition, and (4) the intent of the restraint.

Question 2

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Section 2 of the Sherman Act applies to states, and they may be used as defendants.

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B) False

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Question 3

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When two parties at different levels in the manufacturing and distribution process make an agreement that restrains trade, they have made a ______ restraint against trade.

Which of the following is true if a seller engages in price discrimination in order to compete in good faith with another seller's low price?

A business arrangement in which stock owners appoint beneficiaries and place their securities with trustees who manage the company and pay a share of their earnings to the stockholders is referred to as a trust.

Which of the following standards allows a defendant to offer justification for a per se violation of Section 1 of the Sherman Act, in which case the court will engage in a rule-of-reason analysis?

When a company merges with another company that is not a competitor or a buyer or seller to the company, that merger is called a ______ merger.

Which of the following is the type of violation of Section 1 of the Sherman Act that is involved when it is determined that business practices always hurt consumers?

Farmers are prohibited by antitrust laws from belonging to cooperatives that set prices.

Which of the following was the result in Continental T.V. Inc., v. GTE Sylvania Inc., the U.S. Supreme Court case in which Continental argued that Sylvania violated the Sherman Act by restricting the location of retailers that could sell its product?

Chicago School theorists argue that the central, and perhaps only, purpose of antitrust law is to encourage economic ____.

Which of the following is false regarding antitrust law in Japan?

A merger between two or more companies producing the same or similar products is a ______ merger.

Which of the following references the type of conglomerate merger that occurs when a company merges with another company producing a related product in order to add the related product to the company's production?

"On the Town." Benny began taking people on tours of historic sites in his town. That had not been done before because no one thought there was very much in the way of historical significance there. Benny, however, did some research; and, with a very active imagination on his part, came up with some good stories. He started to make a nice profit with the tours, particularly with tourists passing through the town on the way to the mountains. Benny began to hear of some rival tour groups that were planning to start giving tours in the area. Benny sent a memo to his secretary asking, "How can we shut down other potential tour groups because we want all the business?" One rival company had started operations, but Benny still had 85 percent of the business. His plan was to run the rival out of business and prevent the start-up of any other tour operations in his town. Benny decided that he would offer to do a free advertising brochure to any business that would put up a poster advertising his tour group and agree not to advertise or mention in any way any other tour group. Benny was particularly successful in reaching that agreement with hotels and restaurants in his town because of his likeable personality. When Prudence, who ran a rival tour group heard about Benny's actions, she was furious and accused him of an antitrust violation because he was trying to keep all the tour action for himself. Benny told Prudence she was nuts and that the only reason she had no business was that she stuck to dry historical fact on her tours and did not do research on romantic relationships between individuals in the area in order to "spice-up" her tours. He also told her that he was not a monopolist because he did not have all the business as evidenced by Prudence's own tour service. -What must be proven against Benny in order to establish that he violated antitrust laws through conduct involving monopolization?

When was the Sherman Act enacted?

Which of the following is false regarding private enforcement of antitrust laws?

"On the Town." Benny began taking people on tours of historic sites in his town. That had not been done before because no one thought there was very much in the way of historical significance there. Benny, however, did some research; and, with a very active imagination on his part, came up with some good stories. He started to make a nice profit with the tours, particularly with tourists passing through the town on the way to the mountains. Benny began to hear of some rival tour groups that were planning to start giving tours in the area. Benny sent a memo to his secretary asking, "How can we shut down other potential tour groups because we want all the business?" One rival company had started operations, but Benny still had 85 percent of the business. His plan was to run the rival out of business and prevent the start-up of any other tour operations in his town. Benny decided that he would offer to do a free advertising brochure to any business that would put up a poster advertising his tour group and agree not to advertise or mention in any way any other tour group. Benny was particularly successful in reaching that agreement with hotels and restaurants in his town because of his likeable personality. When Prudence, who ran a rival tour group heard about Benny's actions, she was furious and accused him of an antitrust violation because he was trying to keep all the tour action for himself. Benny told Prudence she was nuts and that the only reason she had no business was that she stuck to dry historical fact on her tours and did not do research on romantic relationships between individuals in the area in order to "spice-up" her tours. He also told her that he was not a monopolist because he did not have all the business as evidenced by Prudence's own tour service. -Which of the following is true regarding Benny's claim that he could not have a monopoly because Prudence was also operating a tour service?

Set forth and describe the three specific types of injuries under the Robinson-Patman Act.

When a company prices one product below normal cost until competitors are eliminated and then sharply increases the price, the company is practicing ______ pricing.