Legal Environment Business Exam 5 (chapter 24)

Mountain Crest Inc. makes and distributes its branded products to authorized dealers. To prevent price-cutting by dealers in direct competition, the firm imposes limits on where each dealer can sell the products. This is

a territorial restriction.

With respect to anticompetitive behavior, the Federal Trade Commission Act prohibits

all forms not covered under other federal antitrust laws.

An antitrust action is brought against Carrier Freight Company, alleging that a certain act constitutes the offense of attempted monopolization. To qualify, the act must

be likely to succeed.

To drive its competitors out of a certain geographic segment of its market, Drones, Inc., sets the prices of its products below cost for the buyers in that area. This is

price discrimination.

When applying the rule of reason to an activity that allegedly violates the antitrust laws, a court will not consider

whether the agreement is a perse violation.

With respect to antitrust violations, the Federal Trade Commission does not enforce

the Sherman Act.

Oil Industries Inc. and Petro Corporation are competing refineries situated on the Gulf coast. The two firms cooperate to obtain federal funds to build a levee that could protect their facilities from rising sea levels. With respect to antitrust law, this effort is

exempt from antitrust enforcement.

Antirust legislation is based on society's desire to

foster competition.

Components Inc., a maker of vehicle parts, refuses to sell to DIY Repair Inc., a national vehicle service firm. The maker convinces Engine Parts Company, a competitor, to do the same. This is

a group boycott.

Dig Inc. is the major wholesale distributor of heavy equipment in six states. Dig's closest competitor is Excavator Company. The two firms agree that Dig will operate in four of the states and Excavator in the other two. This is

a market division.

The medical Device Makers Association does not include all manufactures of medical and surgical instruments. The association refuses to deal with any parties who do not carry the products of its members. This is

a per se violation of antitrust law.

The chief executive officers of the major U.S. Steel makers would most likely be prosecuted under the antitrust laws if they

agreed to work together to control the price of domestic steel.

Pump Makers Inc. makes pumps for fire trucks and conditions shipments of its products to Quality Motors Corporation—a maker of fire trucks—on Quality's agreement to buy additional pumps only from Pump Makers. This is

an exclusive-dealing contract.

Ranch Supplies Company believes that its chief competitor Stock & Equipment Inc. engages in anticompetitive behavior in an attempt to drive Ranch Supplies out of the market. Under the Clayton Act, Ranch Supplies can sue Stock & Equipment for a violation of

any of the federal antirust laws.

Baby Goods Inc. buys Child Shops Inc. in an attempt to gain monopoly power. Remedies that a court might impose in a suit against Baby Goods for a violation of the antitrust laws include

divesting itself of the control or ownership of child shops.

Online Media Inc. bundles its products so that consumers are forced to pay for access to some sites that they do not want in order to obtain access to sites that they do want. A court will likely rule that the bundling does not violate the rule of reason if it

does not injure competition.

Under a contract, Oil Shale Corporation forbids Petro Inc., a wholesale buyer of Oil Shale's products, to purchase products from the seller's competitors. This is prohibited

if its effect is to substantially lessen competition.

Fertile Acres Inc., Growers Farm Co-op, and Harvest Orchards agree to exchange information, conduct an advertising campaign, and set certain regulatory standards to govern their operations. This association is

subject to analysis under the rule of reason.

The federal agencies that enforce the antitrust laws include

the U.S. Department of Justice.

Snowboards Inc. refuses to sell its products to Timber Winter Sports Stores, Inc., a retail snowboard dealership. This violates Section 2 of the Sherman Act if Snowboards has monopoly power and

the refusal has an anticompetitive effect on the market.

Battery Corporation's production, distribution, and marketing methods are unique. Its capital value and size are greater than its competitors. A suit is filed against the firm, alleging the offense of monopolization. To determine whether Battery has monopoly power requires looking at

the relevant market.