BLAW chapter 45
Which of the following occurs when a seller refuses to sell a product "A" to a buyer unless the buyer also purchases product "B" from the seller?
A tie-in contract
Congress enacted the ________ Act. Specifically to clarify the confusion surrounding the extraterritorial reach of the antitrust laws.
Foreign Trade Antitrust Improvement
The _________ requires that proposed mergers or acquisitions that exceed certain size thresholds must be reported to the federal government.
Hart-Scott-Rodino Antitrust Improvements Act
What exists when a firm controls a very high percentage share of the relevant market?
Monopoly power
The _______ Doctrine exempts many anticompetitive acts from the antitrust laws.
Parker
The ________ embraces the actions of state officials under the authority of state law and the actions of private firms or individuals under the supervision of authorized state officials.
Parker Doctrine
Generally, Section 2(a) of the _______ Act prohibits discrimination in price between different purchasers of commodities of like grade and quality.
Robinson-Patman
To violate Section 2(a) of the __________, the discriminatory sales must occur roughly within the same time period, and involve goods of like grade and quality.
Robinson-Patman Act
Which of the following costs is often a critical factor that limits geographic market size? Multiple choice question.
Transportation
Suppose WINMART sells its own "WINMART-brand" products to a chain store for less than it sells its own brand-name products to the chain's competitors. Is WINMART liable under Robinson-Patman?
Yes, if the only difference between the products is their label.
International businesses must be more and more alert to the reach of another nation's ________ as they expand their operations around the world.
antitrust laws
Per se activities are ________, while the legality of a
automatically illegal, ultimate effect on competition
Section 2(d) of the Robinson-Patman Act prohibits sellers from making __________ to competing customers for the same services.
discriminatory payments
According to the Sherman Act, _______ is not an "agreement" within the term's meaning under the Sherman Act.
interdependent behavior
In order to claim monopoly power, the plaintiff should show that the defendant has captured approximately 70 percent or more of the ________ to have monopoly power. Multiple choice question.
relevant market
A vertical merger is a(n) ______ that occurs when a firm acquires a captive market for its products.
supplier-customer merger
Under the Hart-Scott-Rodino Antitrust Improvements Act, proposed mergers or acquisitions affecting United States Commerce that exceed certain size thresholds must be reported to the ______ and the ______.
Federal Trade Commission; Department of Justice
The ________ allows people and businesses to join together and lobby governmental officials for various ends, even though the desired action may harm their competitors or otherwise limit competition.
Noerr Doctrine
The Parker Doctrine is often referred to as the ______ exemption.
state action
Under the FSIA, the _______ commercial activities of foreign sovereigns are not included within this sovereign immunity doctrine.
commercial activities
Sellers will not be liable under Section 2(b) of the Robinson-Patman Act if the seller in good faith agrees to "beat the competition" by granting a(n) _________ to a customer who has been offered a lawful, lower price by one of the seller's competitors.
discriminatory price
To avoid liability under Robinson-Patman, sellers may lawfully provide discriminatory payments or services of: _______. (Check the two correct answers)
flexible plans that enables various classes of buyers, large chains or small independents, to participate. notifying customers of the availability of such services and distributing them according to some rational basis
The _______ defense excuses private parties from complying with our antitrust laws when their anticompetitive conduct has been directed by a foreign government.
foreign sovereign compulsion
An example of a conglomerate merger would be the acquisition by a large firm of a smaller company that has the same product market but in a different _______ market.
geographic
An export trade certificate imparts a presumption of ______ on the conduct of the export trading company, and if an injured party can prove that a violation has occurred, it can receive ______ damages.
legality; actual
The Noerr Doctrine is based on the ______ the United States Constitution.
right to petition recognized by
A seller is not liable under Section 2(a) of the Robinson-Patman Act if he can show: _______. (Check the two correct answers)
the difference in prices is based on lower transportation costs the difference in prices is based on manufacturing costs
A seller is not liable under Section 2(a) of the Robinson-Patman Act Sellers if she can show the price discrimination reflects: ________.
the marketability of the goods changing conditions in the marketplace the product's deterioration or obsolescence
A(n) ______ merger is a supplier-customer merger and occurs when a firm acquires a captive market for its products or a captive supplier of a product it regularly buys.
vertical
As a matter of business policy, a manufacturer can lawfully ______ assign exclusive dealerships to various entities in an geographic area.
unilaterally
Monopolists have the power to fix prices _______ because they have no effective competition and Section 2 of the Sherman Act was designed to attack monopolies.
unilaterally
Which of the following are generally examined under rule of reason analysis
vertical restraints
Section 7 of the ________ prohibits any corporation engaged in commerce from acquiring all or part of the stock or assets of any other corporation engaged in commerce when the effect would tend to create a monopoly. Multiple choice question.
Clayton Act
If certain conditions are met, the Antitrust Division's __________ the US government agrees not to charge a firm criminally for the activity being reported if certain conditions are met.
Corporate Leniency Policy
Under the ________, corporate officers and directors who assist with the investigation are considered for __from prosecution on the same basis as if they had come forward individually. Multiple choice question.
Corporate Leniency Policy, immunity
For what reason is any agreement among competing firms to divide up the available market by assigning each other exclusive territories illegal per se?
Each firm is given a monopoly in its assigned territor
________ of goods that may be artificially inflated due to energy shortages cannot sue the manufacturers directly because it is not an antitrust violation to pass the increased costs of goods and energy on to the ultimate buyer. Multiple choice question.
Indirect purchasers
Which of the following could possibly violate Section 1 of the Sherman Act because they generally involve cooperation between actual or potential competitors? Multiple choice question.
Joint ventures
Suppose all the lumber stores in a city conspired to fix artificially high prices to ensure that lumber was sold above above some inflated figure to new home contractors. Do the homeowners have recourse against the lumber stores under existing antitrust laws?
NO, the homeowners have no recourse because they are indirect purchasers of the lumber
_______ restraints may ultimately be found anticompetitive and illegal, but, unlike per se restraints, they are not facially so. Multiple choice question.
Rule of reason
If the defendant is a small newspaper company and has monopoly power because it is the only survivor in a market that can support only one firm of its kind: _______.
Section 2 is not violated
The Foreign Trade Antitrust Improvement Act provides that the ________ Act shall not apply to non import trade unless the conduct has a direct, substantial, and reasonably foreseeable effect on trade or commerce within the United States, on US import trade, or on the activities of US exporters.
Sherman
True or false: In a rule of reason trial the court endeavors to balance the anticompetitive effects of the defendants' acts against any competitive justifications for their behavior.
True
A(n) ________ is a "quick look" form of rule of reason analysis because it skips the inquiry into anticompetitive effects because they are obvious from the general nature of the restraint.
abbreviated rule of reason
A(n)______ analysis is utilized for restraints that have an obvious adverse impact on competition but are not per se treatment because their overall reasonableness cannot be ascertained without a preliminary assessment.
abbreviated rule of reason
Examples of horizontal price-fixing may include: ________. (Check all that apply)
agreements among competitors about what price they will sell a product for or what price agreements among competitors on the quantities to be produced, offered for sale, or bought.
The primary focus of U.S. antitrust enforcement is to protect American consumers from: _______.
anticompetitive conduct
Private individuals who have been injured by antitrust violations have strong incentives to sue under the ________ of the antitrust laws.
civil provisions for treble damages
In order to prevail on a claim of _______ based on inferences from consciously parallel behavior, plaintiffs must show that certain ______ also exist.
collusion, plus factors
Section 3 of the Clayton Act applies only to _______, so tie-in, exclusive dealing, and requirements contracts that involve _______ must be attacked under Section 1 of the Sherman Act.
commodities, services
A(n) _______ merger occurs when a large firm that controls numerous other firms in diverse industries acquires a firm in a new product market.
conglomerate
Section 1 of the Sherman Act provides that a ________ occurs when two or more persons join together for the purpose of restraining trade."
conspiracy
Although there is no ________ liability for Clayton Act violations, ________ damages are available to private plaintiffs.
criminal; treble
In exchange for _________, the defendant must pay full restitution to private plaintiffs and assist them in their actions against co-conspirators.
detrebling civil damages
If a defendant acquires a(n) _______ through superior products and service or other demonstrations of business acumen, the intent to monopolize will not be found. Multiple choice question.
dominant market position
A(n) _______ contract is created when a buyer agrees to sell only the product lines of her seller. Multiple choice question.
exclusive dealing
Unlike tie-in contracts, ________ and requirements contracts are not illegal because they can benefit both buyer and the seller by reducing selling costs and assuring buyers of a supply of needed items.
exclusive dealing contracts
Unlike per se restraints, _________ restraints may ultimately be found anticompetitive and illegal, but not until after a court conducts a full market analysi
full rule of reason
The Sherman Act has been interpreted to reach foreign entities whose actions: _________. (Check the two correct answers)
have an anticompetitive effect in the United States limit American access to markets abroad
The United States Supreme Court requires a higher level of proof of anticompetitive effects result whenever a(n) _______ produces a firm with a large market share.
horizontal merger
Attempts by competitors to interfere with the market and control prices are called ________ and are illegal per se under Section 1.
horizontal price-fixing
Courts are cautious in accepting inferences from circumstantial evidence in cases involving allegations of __________ among oligopolists.
horizontal price-fixing
Whether done directly or indirectly, ________ is always illegal and can never be legally justified.
horizontal price-fixing
Any agreement among competing firms to divide up the available market by assigning each other exclusive territories is a _______ division of markets and is ________. Multiple choice question.
horizontal, illegal per se
A court will not infer an agreement (or joint action) from the actions of the defendants in the following areas: _______. (Check all the correct answers)
if a corporation conspires with a wholly owned subsidiary. if a corporation conspires with itself or its employees
The Sherman Act makes contracts _________ of trade and monopolization illegal.
in restraint
According to the theory of _______, firms in a concentrated market may maintain their prices at supracompetitive levels without engaging in any overt concerted action.
independence
Violations of antitrust laws provide penalties, including fines and jail time, as well as giving federal courts broad ________ to remedy antitrust violations. Multiple choice question.
injunctive powers
Although the first two plus factors are important to a court's analysis, they must be supplemented by other evidence because they often merely restate _______.
interdependence
Even commercial transactions that take place solely within the borders of one state can have an impact on ________ commerce in today's economy.
interstate
Commercial behavior that affects only ________ commerce is outside the scope of the federal antitrust laws and must be challenged under state antitrust statutes, some of which are not vigorously enforced.
intrastate
If a court finds a(n) _______ in a Section 1 analysis, it must then examine the nature of the alleged violation to determine its legal status.
joint action
the retailer chooses to price the manufacturer's product based on the "suggested" price, then there is ________ in restraint of trade and may be _______ under Section 1. Multiple choice question. joint
joint action, per se illegal
From the language of the Sherman Act, it is apparent that the purpose of Section 1 is to attack ________ in restraint of trade while _______ actions do not violate Section 1.
joint action, unilateral
Antitrust violations that occur within the territory of the United States fall squarely within the ________ of the US antitrust laws.
jurisdictional reach
A company will frequently attempt to exploit the market by __________ its intellectual property to licensees who may be manufacturers or distributors.
licensing
A(n) ________ can raise antitrust issues if its involves restraints on the competitive activities of the licensor and/or licensee.
licensing arrangemen
Federal courts can order defendants convicted of antitrust violations to: ________. (Check the three correct answers).
liquidate its assets and go out of business divorce themselves from a functional level of their operations divest themselves of the stock or assets of other companies
Plus factors that may show circumstantial evidence for collusion include all of the following except: _______.
manufacturer and agent agreeing on a sales price for a product
Under a Section 7 analysis, a court seeking to determine the legality of a horizontal merger (between competitors) would consider the _________ of the resulting firm.
market share
Section 7 of the Clayton Act was designed to provide a tool for attacking ________ , which broadly means the acquisition of one company by another.
mergers
Section 2 of the Sherman Act does not outlaw monopolies; rather it outlaws the act of "_______."
monopolizing
When a firm acquires ________—the power to fix prices or exclude competitors—in a particular market, the antitrust laws' objective of promoting competitive market structures has been defeated. Multiple choice question.
monopoly power
The Clayton Act was intended to be preventive in nature, and in most cases __________ of a significant anticompetitive effect must be shown to establish a violation. Multiple choice question.
only the probability
Although a single firm can lawfully agree to deal only on certain terms, if two firms agree to deal on certain terms, the agreement is a _______ violation of Section 1.
per se
Actions that result in a restraint of trade are classified as ______, and are conclusively presumed to be illegal.
per se illegal
If a distributor persuades a manufacturer to refuse to deal with a rival distributor, the two conspiring parties would have committed a(n) _______ of Section 1 of the Sherman Act.
per se violation
If the court finds a joint action, it will be treated as either a(n) _______ or a(n) ______ violation.
per se, rule of reason
Recent United States Supreme Court antitrust decisions indicate that the Court is moving away from ______ rules in favor of ______ treatment for many kinds of economic activity.
per se, rule of reason
Assuming a competitive market, evidence that a defendant acted contrary to its interests would be considered a(n) _______ because it would show circumstantial evidence of a contract.
plus factor
The intent to monopolize often occurs when a monopolist engages in ________.
predatory pricing
After the Civil War, the growth of large industrial trusts led to a public outcry for legislation designed to: _______.
preserve competitive market structures and prevent the accumulation of great economic power in the hands of a few firms
Evidence that the defendant had a motive to enter into a(n) ________ conspiracy means evidence that the industry is conducive to oligopolistic price-fixing.
price-fixing
Examples of circumstantial evidence of collusion would involve: _______. (Check all the correct answers)
proof defendants got together and exchanged assurances of common action proof that defendants adopted a common plan,
There are two prerequisites to recovery on claims of predatory pricing: ________. (Check the two correct answers)
proof that the low prices were below an appropriate measure of its rival's costs a dangerous probability that the monopolist will later recoup its investment in below-cost prices.
The purpose of U.S. antitrust law is to ______ and _______ competition. (Choose the two correct answers)
protect encourage
Based on the courts analysis and transportation costs, the ______ may be a small area for cement but the whole nation for transistors.
relevant geographic market
The ________ is composed of those products that are "reasonably interchangeable by consumers for the same purposes". Multiple choice question.
relevant product market
A(n) ________ contract is created when a buyer agrees to purchase all of its needs in a certain item from one seller.
requirements
Another name for vertical price-fixing is ______
resale price maintenance__
Courts typically conclude that actions that result in a(n) ________ always have a negative effect on competition and can never be excused or justified.
restraint of trade
Vertical agreements establishing minimum resale prices can have either pro-competitive or anti-competitive effects, depending upon the circumstances in which they are formed, and are generally analyzed under the ________. Multiple choice question.
rule of reason
_______ restraints may ultimately be found anticompetitive and illegal, but, unlike per se restraints, they are not facially so.
rule of reason
Which provision of the Sherman Act provides the following: A contract is any agreement, express or implied, between two or more persons to restrain competition; a combination is a continuing partnership in restraint of trade?
section 1
Which federal legislation indicates as follows: Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations is declared to be illegal?
sherman act
joint venture
strategic alliance
For predatory-pricing to make economic sense, the losses suffered from pricing goods below cost must be recouped during the _________ stage of the scheme. Multiple choice question.
supracompetitive-pricing
If a manufacturer terminates a dealer who has failed to sell its product below the suggested resale price, Section 1 of the Sherman Act is not violated because:_______.
the action was unilateral
Which of the following is based on the idea that a firm's power to fix price is limited by the availability of competing products that buyers find acceptable?
the functional interchangeability test
In order to show monopoly power relevant market must be analyzed which includes the following two factors: ________. (Check the two correct answers)
the geographic market
Tie-in contracts are illegal under Section 3 of the Clayton Act ONLY if either of the following two requirements are met: ________. (Check the two correct answers)
the seller has monopoly power in the tie-in product the seller has foreclosed competitors from a substantial volume of commerce in the tied product.
Section 3 of the Clayton Act was basically designed to attack three kinds of anticompetitive behavior: _______. (Check the three correct answers)
tie-in (tying) contracts exclusive dealing contracts requirements contracts
A successful antitrust plaintiff may recover _________ (three times its actual losses) plus court costs and attorney's fees.
treble damages
Private plaintiffs who seek to recover _________ damages must first convince the court that they have _______ to sue, that is, that they have suffered a direct injury as a result of the defendant's claimed antitrust violations.
treble, standing
True or false: Manufacturers may run afoul of Section 1 if they require their dealers to agree to refrain from selling to customers outside their assigned territories. True false question. True
true
Vertical, nonprice restraints are analyzed: _______. Multiple choice question.
under the rule of reason
For the purposes of Section 1 of the Sherman Act, consignments have been held to be a _______ action.
unilateral
A single manufacturer's use of _______ restraints on price or territory tends to eliminate intrabrand competition.
vertical
Absent _______ price restraints, retail services that enhance interbrand competition might be underprovided.
vertical
The competitors of a manufacturer that acquires a chain of retail stores are no longer able to compete for sales to the acquired stores due to a(n) _________.
vertical merger
A group of retailers colluding to fix prices to consumers while compelling a manufacturer to aid in the arrangement, would be unlawful as a(n) _____
vertical price fixing because of the joint action
