LGS 200 Quiz 17 Antitrust & Regulation of Competition

Which of the following is a vertical restraint?

exclusive selling agreements.

Business entities contemplating a merger involving dollar amounts of a certain size are required to give advance notice to the FTC and the Department of Justice under:

the Hart-Scott-Rodino Antitrust Improvements Act. (Notice under the Hart-Scott-Rodino Antitrust Improvements Act is required and allows for a veto of the merger if it violates any antitrust laws.)

Gas station owners agreeing on the price per gallon is not a violation of the Sherman Act.

False.

The NBA signing an agreement for all the teams to wear a single brand of shoes would not fall under the Sherman Act.

False. (Each NBA team would be treated as a separate entity and not as a collective unit under the American Needle case.)

It is not illegal for a grocery store to require a customer to buy milk in order to buy cookies.

False. (Illegal tie-in agreement)

All monopolies are illegal.

False. (Only monopolies that have been acquired or maintained through prohibited means are illegal.)

U.S. v. Microsoft held that the appropriate standard to analyze Microsoft's actions in the browser market was the per se standard.

False. (The rule of reason analysis was applied rather than a per se analysis.)

Michelin, Goodyear, Goodrich, Bridgestone and other major manufacturers of automobile tires have decided that they are losing money by selling tires that last too long. They agree to stop making any tire that is designed to last over 30,000 miles. As long as they don't collude regarding prices, they are not violating the Sherman Act.

False. (This is similar to illegal price fixing but instead has to do with competitors fixing quality and is a horizontal violation under the Sherman Act.)

Vertical price-fixing occurs when a seller attempts to control the resale price at a higher level in the supply chain.

False. (Vertical price-fixing occurs when a seller attempts to control the resale price at a lower level in the supply chain.)

Which act was designed to prevent companies from creating monopolies through mergers and acquisitions?

The Clayton Act

Which act was designed to prevent monopolies from being created through mergers?

The Clayton Act

Price-fixing is a clear example of a per se violation.

True.

The Clayton Act was amended by the Robinson-Patman Act.

True.

The court order for Microsoft to break apart into multiple entities in U.S. v. Microsoft was overturned on appeal.

True.

The test for determining a monopoly under the Sherman Act is the entity's share of the relative market.

True.

Unilateral boycotts do not fall under the Sherman Act.

True. (In the case of U.S. v. Colgate, the court found that unilateral boycotts do not fall under the Sherman Act.)

It is the day before the Super Bowl and the local grocery store has mandated that in order to buy potato chips or pretzels, the buyer must also purchase a two liter bottle of soda. This is:

a tying agreement.

Which of these is an example of a tying agreement?

as a part of buying a new computer, you must also purchase a new monitor

A ________is a concerted refusal to deal with a third party.

boycott