Business Law Chapter 5

The Clayton Act prohibits:

price discrimination between buyers of like commodities

The Sherman Act applies to all of the following except:

production activities

The Robinson-Patman Act:

prohibits boycotts among competitors.

For violation of the Sherman Act, the maximum fine that may be imposed on a natural person is:

$1 million

Section __________ of the Sherman Act applies to agreements, conduct, or conspiracies to restrain trade, which can consist of price-fixing, typing, and monopolization

1

Governments may regulate prices but not credit terms

False

The Sherman Act applies only to buying and selling activities, not manufacturing and production activities.

False

A violator of the Sherman Act may be subject to:

both fine and imprisonment.

The Sherman Act does not prohibit:

competitors from agreeing not to deal with certain buyers

A person who is harmed by a conspiracy that violates the Sherman Antitrust Act may sue the wrongdoers for treble damages, which is four times the actual damages

False

An agreement between real estate brokers to never charge a commission less than 6% is not an example of price fixing

False

An agreement to charge an agreed-upon price or to set maximum or minimum prices between or among competitors is called price fixing but it is not per se a violation of the Sherman Act

False

Price discrimination is not permitted even when it can be justified on the basis of a difference in grade, quality, or quantity.

False

Requiring buyers to purchase one product in order to get another is acceptable practice and not a violation of the Sherman Act

False

Under the Robinson-Patman Act, wholesalers may give new distributors free advertising and other services to help them compete with other distributors who have been doing business for a number of years and have become firmly established.

False

__________ power relates to a firm's ability to control price and exclude competitors.

Market

A "suggested retail price" is not a violation of the antitrust laws

True

A divestiture order is a decree ordering a defendant to dispose of excessive ownership or control of interests in competing enterprises

True

A manufacturer having a restriction on territories in the form of a sole outlet is a per se violation

True

A price reduction to one customer is lawful when it is made because of the deteriorated condition of the goods sold to that customer

True

A state may prohibit a seller from selling below cost if the purpose is to harm competitors

True

Boycotts are always illegal, even when done with good intentions

True

Criminal penalties are possible under the Sherman Act

True

Each of the states and the federal government have statutes and regulations that prohibit unfair methods of competition

True

Having a large percentage of the market is not necessarily a monopoly

True

Market power under the Sherman Act is defined by both geographic and product markets

True

Nobel economist Milton Friedman believes that government regulation of business interferes with the free enterprise system.

True

The Clayton Act prohibits price discrimination between different buyers of like commodities when the effect may be to substantially lessen competition

True

The Federal Trade Commission administers the law prohibiting unfair methods of competition

True

The Robinson-Patman Act guarantees a seller the right to refuse to deal with anyone for any reason or purpose

True

The United States Supreme Court generally has held that vertical merger agreements should not automatically be condemned as an unlawful restraint of interstate commerce merely because they create the potential to monopolize it

True

The attorney general of a state may bring a class action suit to recover damages for those injured by an antitrust violation which raised prices

True

The government can regulate not just businesses, but also business competition and prices

True

Under the Sherman Act competitors are permitted to agree not to deal with certain buyers

True

​A(n) _________occurs when the seller makes a buyer who wants to purchase one product buy an additional product that he or she does not want

Tying arrangement

​Price discrimination is expressly permitted in all of the following except

When involving the cost of transportation

Under the Clayton Act, a divestiture order is:

an order by a court requiring an enterprise to dispose of its inventory

Under the Clayton Act, when large-scale enterprises plan to merge, they must in advance:

complete the necessary financing arrangements

When the effect of an antitrust violation is to raise prices:

damages are automatically considered doubled.

Under the Sherman Act, any person who attempts to monopolize any part of the trade or commerce among the states shall be:

guilty of a felony

Vertical mergers:

occur between firms that have buyer and seller relationships

Unfair competition is controlled by

statutes, administrative agencies, administrative regulations.

​A person or enterprise harmed by a Sherman Act violation may bring an action for:

treble damages

All of the following are true about tying, except:

tying prohibits price discrimination.

​The Sherman Act focuses on:

unfair methods of competition