Deck 10: Antitrust Law-Restraints of Trade

Question 1

In general,criminal law remedies are not available under the Clayton Act.

Answer 1

True
Explanation: Civil enforcement of the Clayton Act is similar to the Sherman Act in that injured parties may sue for injunctive relief and treble damages.In general,criminal law remedies are not available under the Clayton Act.

Question 2

A policy of conscious parallelism is not a violation of the Sherman Act.

Answer 2

True
Explanation: The policy of conscious parallelism is fully lawful because the competitors have not agreed either explicitly or by implication to follow the same course of action.Rather,their business judgment has led each to independently follow parallel paths.

Question 3

Tying arrangements are a form of nonprice vertical restraint.

Answer 3

True
Explanation: Tying arrangements (sometimes called "bundling") are a form of nonprice vertical restraint.Typically,tying arrangements permit a customer to buy or lease a desired product (the tying product) only if the customer also buys or leases another,less desirable product (the tied product).

Question 4

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.

Question 5

When competitors collude,conspire,or agree among themselves,they are engaging in vertical restraints of trade.

Question 6

Price discrimination involves selling substantially identical goods at reasonably contemporaneous times to different purchasers at different prices.

Question 7

Vertical restraints are those arising from an agreement among competitors.

Question 8

Vertical territorial and customer restraints are to be resolved under the rule of reason.

Question 9

Conscious parallelism,which is allowed under the Sherman Act,arises from an explicit agreement between competitors.

Question 10

As a result of the existence of an exclusive deal,competitors are denied a source of supply or a market for sale.

Question 11

A horizontal group boycott is a situation where competitors agree not to deal with a supplier,customer,or another competitor.

Question 12

Many businesses in competition meant that none of them could corner economic,political,or social power.Which of the following goals of antitrust law best describes the above statement? A) The preservation of competition
B) The preservation of small businesses
C) An expression of political radicalism
D) The preservation of democracy

Question 13

The rule of reason refers to the Supreme Court's position that all restraints of trade are per se unlawful.

Question 14

A company agrees to restrict sales to the east of the city,and its competitor agrees to restrict sales to the west of the city.This arrangement is lawful under the Sherman Act.

Question 15

The Sherman Antitrust Act forbids monopolization,attempts to monopolize,and conspiracies to monopolize.

Question 16

Price discrimination involves selling services at reasonably contemporaneous times to different purchasers at different prices,where the effect is to harm competition.

Question 17

In the 2007 Leegin case,the Supreme Court ruled that agreements specifying minimum resale prices must be analyzed under the rule of reason.

Question 18

The U.S.Supreme Court has ruled that patents should not automatically be treated as monopolies.

Question 19

Injured parties may sue for injunctive relief and treble damages under the Clayton Act.

Question 20

A seller may resist a Robinson-Patman charge by establishing that the price differential is attributable to cost savings.

Question 21

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

Question 22

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.

Question 23

The Federal Trade Commission's primary enforcement device is _____.

A)arbitration
B)the requirements contract
C)imposing criminal penalties
D)the cease and desist order

Question 24

Which of the following is a horizontal restraint of trade?

A)Tying arrangements
B)Resale price maintenance
C)Price fixing
D)Free riding

Question 25

_____ 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

Question 26

The various horizontal restraints of trade are governed by the _____.

A)Robinson-Patman Act
B)Sherman Act
C)Clayton Act
D)Wagner Act

Question 27

Which of the following forbids price discrimination,tying arrangements,mergers restraining commerce or tending to create a monopoly,and interlocking directorates?

A)The Clayton Act
B)The Sherman Antitrust Act
C)The Robinson-Patman Act
D)The Sarbanes-Oxley Act

Question 28

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

Question 29

_____ 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

Question 30

Which of the following statements is true of antitrust violation of intellectual property rights?

A)The U.S.Supreme Court has ruled that patents should automatically be treated as monopolies.
B)Abuse of the market power conferred by a patent must be presumed and need not be proven.
C)The presence of intellectual property rights suppresses innovation and investment.
D)Antitrust violations of intellectual property do not occur unless some competitive wrong is identified.

Question 31

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.

Question 32

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

Question 33

The reasonableness of a restraint of trade is largely established by _____.

A)a detailed balancing of the pro- and anticompetitive effects of the situation
B)eliminating competition and facilitating high-profile mergers
C)an analysis of costs and benefits associated with the existing predatory practices and its effects on the government treasury
D)producing circumstantial evidence from participants proving the existence of collusion

Question 34

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

Question 35

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

Question 36

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.

Question 37

Which of the following statements is true of the Sherman Antitrust Act,1890?

A)It provides injunctive relief under civil law.
B)It does not entail criminal penalties in case of any violations of the act.
C)It encourages monopolization.
D)It facilitates the practice of interlocking directorates.

Question 38

Which of the following statements is true of the Clayton Act?

A)Injured parties cannot sue for injunctive relief under the Clayton Act.
B)The Clayton Act opens participants to criminal penalties in case of any violation of the act.
C)The Clayton Act does not provide for criminal law remedies.
D)The Clayton Act facilitates tying arrangements.

Question 39

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.

Question 40

Section 2 of the Sherman Antitrust Act,1890 forbids:

A)price discrimination.
B)monopolization.
C)tying arrangements.
D)patents and copyrights.

Question 41

How does the law address patent/antitrust conflicts?

Question 42

Explain the difference between per se antitrust violations and those analyzed under the rule of reason.

Question 43

Explain predatory pricing with examples.

Question 44

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.

Question 45

What is price discrimination? What are the defenses to a Robinson-Patman charge?

Question 46

Identify and explain the elements a plaintiff must prove to establish an illegal tying arrangement.

Question 47

Which of the following is a vertical restraint of trade?

A)Horizontal price fixing
B)Refusal to deal
C)Tying arrangements
D)Dividing territories

Question 48

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

Question 49

Explain the changing goals of antitrust law.

Question 50

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

Question 51

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.

Question 52

How is the presence of an unlawful price-fixing arrangement established?

Question 53

Define resale price maintenance.

Question 54

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

Question 55

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