Leg/Soc-Chapter 10
Manufacturers and distributors often seek to specify the price at which their customers may resell their products, a policy which is referred to as _____. A. resale price maintenance B. horizontal price fixing C. price discrimination D. predatory pricing
A
Predatory pricing: A. involves pricing below cost until a competitor drops out and then raising those prices to supracompetitive levels. B. involves selling substantially identical goods at reasonably contemporaneous times to different purchasers at different prices. C. prevents distributors from selling to some classes of customers. D. imposes nonprice restraints including where and to whom products may be resold.
A
Shaun opens a pastry shop right across the street from his competitor, Jason's pastry shop. To eliminate Jason's competition, Shaun radically lowers prices of his pastries attracting customers to his pastry shop and eventually driving Jason out of business. Which of the following antitrust violations could Shaun be charged with? A. Predatory pricing B. Price discrimination C. Psychological pricing D. Dual pricing
A
When competitors collude, conspire, or agree among themselves, they are engaging in _____. A. horizontal restraints of trade B. resale price maintenance C. free riding D. tying arrangements
A
Which of the following involves selling substantially identical goods at reasonably contemporaneous times to different purchasers at different prices, where the effect may substantially lessen competition or tend to create a monopoly? A. Price discrimination B. Predatory pricing C. Resale price maintenance D. Conscious parallelism
A
Which of the following is a restraint that arises from an agreement among competitors themselves? A) Horizontal restraint of trade B) Franchise tying C) Vertical restraint of trade D) Conscious parallelism
A
_____ permits a customer to buy or lease a desired product only if he/she also buys or leases another, less desirable product. A. A tying arrangement B. Price discrimination C. A predatory pricing strategy D. Conscious parallelism
A
A(n) _____ is one in which a seller agrees to supply all of a buyer's needs, or a buyer agrees to purchase all of a seller's output, or both. A. exclusive dealing contract B. requirements contract C. tying arrangement D. free rider
B
By its nature a(n) _____ results in market foreclosure; that is, competitors are denied a source of supply or a market for sale. A. price differential B. exclusive deal C. tying arrangement D. free rider
B
Section 2 of the Sherman Antitrust Act, 1890 forbids: A. price discrimination. B. monopolization. C. tying arrangements. D. patents and copyrights.
B
Which of the following is forbidden under Section 1 of the Sherman Antitrust Act, 1890? A. Monopolization B. Restraints of trade C. Attempts to control D. Conspiracies to monopolize
B
Which of the following statements is true of vertical restraints? A. They typically arise from an agreement among competitors themselves. B. They are to be resolved under the rule of reason. C. They are per se unlawful. D. They tend to drive product prices down and quality up.
B
Which of the following is a horizontal restraint of trade? A. Tying arrangements B. Resale price maintenance C. Price fixing D. Free riding
C
Which of the following is a vertical restraint of trade? A. Horizontal price fixing B. Refusal to deal C. Tying arrangements D. Dividing territories
C
When competitors agree not to deal with a supplier, customer, or another competitor, it is referred to as a _____. A. price differential B. parallel conduct C. tying arrangement D. horizontal group boycott
D
Which of the following is a difference between vertical restraints and horizontal restraints? A. Vertical restraints, in general, are based on tacit understanding while horizontal restraints, in general, are based on mutual observation. B. Vertical restraints eliminate competition, while horizontal restraints promote competition. C. Vertical restraints are those arising from an agreement among competitors themselves, while horizontal restraints ordinarily are those imposed by suppliers on their buyers. D. Vertical restraints, in general, are resolved under the rule of reason while horizontal restraints, in general, are per se unlawful.
D
Which of the following is true of horizontal price fixing? A. Its occurrence need not be proved. B. It is to be resolved under the rule of reason. C. It is imposed by suppliers on their buyers. D. Their mere existence constitutes unlawful conduct
D
Which of the following occurs through an exclusive dealing contract? A. The sellers in a market compete to drive prices down and quality up. B. A seller colludes with another seller to jointly restrict their output. C. The sellers in a market agree to divide the market into exclusive territories to reduce competition. D. A buyer commits to deal only with a specific seller
D
Which of the following statements is true of vertical territorial and customer restraints? A. They are a type of price restraint. B. They arise from agreements among competitors. C. They encourage intrabrand competition. D. The rule of reason is to be applied to such restraints.
D
_____ is fully lawful because competitors have not agreed either explicitly or by implication to follow the same course of action. A. Vertical price fixing B. Bundling C. Horizontal price fixing D. Conscious parallelism
D
1. When competitors collude, conspire, or agree among themselves, they are engaging in vertical restraints of trade.
F
2. The rule of reason refers to the Supreme Court's position that all restraints of trade are per se unlawful.
F
3. Vertical restraints are those arising from an agreement among competitors.
F
6. An exclusive dealing contract is one in which defendants have simply observed each other's pricing behavior over time, and they are able therefore to anticipate each other's future conduct and act accordingly without any direct collusion.
F
9. Price discrimination involves selling services at reasonably contemporaneous times to different purchasers at different prices, where the effect is to harm competition
F
Conscious parallelism, which is allowed under the Sherman Act, arises from an explicit agreement between competitors.
F
4. Vertical territorial and customer restraints are to be resolved under the rule of reason.
T
5. Tying arrangements are a form of non-price vertical restraint.
T
7. As a result of the existence of an exclusive deal, competitors are denied a source of supply or a market for sale.
T
8. Price discrimination involves selling substantially identical goods at reasonably contemporaneous times to different purchasers at different prices.
T
A horizontal group boycott is a situation where competitors agree not to deal with a supplier, customer, or another competitor.
T
A policy of conscious parallelism is not a violation of the Sherman Act.
T
In the 2007 Leegin case, the Supreme Court ruled that agreements specifying minimum resale prices must be analyzed under the rule of reason.
T
The Sherman Antitrust Act forbids monopolization, attempts to monopolize, and conspiracies to monopolize.
T
The U.S. Supreme Court has ruled that patents should not automatically be treated as monopolies.
T
Vertical territorial and customer restraints are to be resolved under the rule of reason.
T
