Deck 16: Business Competition: Antitrust

Question 1

Competition restraints in commercial leases are generally valid.

Answer 1

True

Question 2

The Sherman Act imposes fines and imprisonment for violations.

Answer 2

True

Question 3

Covenants not to compete cannot be used in agreements for the sale of businesses.

Answer 3

False

Question 4

The Robinson-Patman Act deals with price discrimination.

Question 5

The interstate commerce jurisdictional standard for the Sherman Act requires proof of transactions across state lines.

Question 6

Predatory pricing is illegal.

Question 7

Monopoly power is the power to control prices or exclude competition.

Question 8

The Clayton Act provides for treble damage recovery for all antitrust violations.

Question 9

Generally, joint ventures among competitors in international business are per se violations of the Sherman Act.

Question 10

The Clayton Act does not carry criminal penalties.

Question 11

Only Clayton Act violations carry treble damages.

Question 12

Cross-elasticity of demand is irrelevant in determining the product market.

Question 13

The Celler-Kefauver Act regulates asset acquisitions.

Question 14

Equitable remedies are not available under the Sherman Act.

Question 15

The Antitrust Improvements Act gave the Justice Department broader investigative authority.

Question 16

The Sherman Act does not apply unless sales across state lines are involved.

Question 17

Predatory pricing is pricing below actual cost.

Question 18

Together, Christie's and Sotheby's controlled about 75% of the international auction market.

Question 19

Section 1 of the Sherman Act covers monopolization.

Question 20

Covenants not to compete are illegal per se.

Question 21

Conscious parallelism negates market forces.

Question 22

Joint ventures among competitors are per se violations.

Question 23

Fair trade laws are still in effect in many states.

Question 24

Setting minimum prices is a per se violation of the Sherman Act.

Question 25

Private parties can bring suit under the Federal Trade Commission Act.

Question 26

The Noerr-Pennington doctrine is an antitrust exception that originates in the First Amendment.

Question 27

The failing company doctrine is an exception to horizontal merger restrictions.

Question 28

Customer and territorial restrictions are per se antitrust violations.

Question 29

Group boycotts are per se violations.

Question 30

Price control consignments are treated as forms of resale price maintenance.

Question 31

Predatory pricing is not specifically covered in any of the antitrust laws.

Question 32

Resale price maintenance is a per se violation of the Sherman Act.

Question 33

Monopolization is a vertical restraint of trade.

Question 34

Division of markets is a per se violation.

Question 35

Limitations on bidding are permitted in professional bids such as in architecture and service contracts.

Question 36

The Celler-Kefauver Act is part of the Clayton Act.

Question 37

Resale price maintenance is a vertical restraint of trade.

Question 38

Exclusive distributorships are per se antitrust violations.

Question 39

Setting maximum prices is a per se violation of the Sherman Act.

Question 40

An agreement among competitors for elimination of bidding is a violation of federal antitrust laws.

Question 41

A price cap imposed by a distributor on retail outlets is a violation of federal antitrust laws.

Question 42

The tying product is the desired product.

Question 43

A vertical merger that prevents market entry is illegal.

Question 44

Sole outlets are not antitrust violations when there is interbrand competition.

Question 45

Tying arrangements are per se antitrust violations.

Question 46

Meeting the competition is a defense to price discrimination.

Question 47

A tying arrangement requires the seller to have market power in the tying product.

Question 48

The legality of vertical mergers is determined by the relevant geographic and product markets.

Question 49

Corporate officers are not liable for violations of the Sherman Act.

Question 50

A tying arrangement requires the seller to have market power in the tied product.

Question 51

A defense to tying is quality control.

Question 52

Requiring a franchisee to use trademark napkins is a per se antitrust violation.

Question 53

Exclusive dealing contracts are per se violations.

Question 54

A covenant not to compete in a contract for the sale of a business protects the goodwill of the existing business for the buyer.

Question 55

There is no price discrimination when lower prices are charged for generic label cans of the same product.

Question 56

An agreement among competitors to control the supply of their products to the market violates the Sherman Act.

Question 57

Refusals to deal are a per se violation of the Sherman Act.

Question 58

Generic brands can carry a lesser price than brand-name products even though identical in composition without experiencing price discrimination difficulties.

Question 59

The Sotheby's ­ Christie's case illustrates, among other things, that companies will sacrifice its employees to save
the company.

Question 60

A covenant in the sale of a dry cleaning business that prohibits the seller from operating a dry cleaning business anywhere in that state is too restrictive to be enforced.

Question 61

Interlocking directorates tend to be efficient, effective, ethical, and legal.

Question 62

Manufacturers who refuse to deal with retailers who do not charge a suggested retail price have committed a per se violation of the antitrust laws.

Question 63

The ability of a competitor to control the prices of a supplier in a market is a monopsony.

Question 64

The market definition controls whether there is market power.

Question 65

Which act contains prohibitions on monopolization?

A) Sherman Act
B) Clayton Act
C) Robinson-Patman Act
D) Celler-Kefauver Act
E) none of the above

Question 66

A monopsony is illegal per se.

Question 67

The Celler-Kefauver Act:

A) is an amendment to the Clayton Act.
B) regulates mergers.
C) is the Antitrust Improvements Act.
D) none of the above

Question 68

In Weyerhaeuser v. Ross-Simmons, Weyerhaeuser was found liable for:

A) predatory bidding.
B) predatory pricing.
C) nothing.
D) monopsony violations.

Question 69

A monopsony is the same thing as a monopoly.

Question 70

Quantity discounts violate the Robinson-Patman Act.

Question 71

Meeting the competition is a defense to price discrimination.

Question 72

The judicial approach to antitrust cases is one of weighing benefits to competition.

Question 73

Which of the following is not regulated by the Clayton Act?

A) interlocking directorates
B) mergers
C) tying sales
D) monopolization
E) All of the above are regulated by the Clayton Act.

Question 74

Which of the following is not required for an enforceable covenant not to compete?

A) sale of a business
B) reasonable geographic scope
C) reasonable time limits
D) All of the above are required.

Question 75

Which of the following acts prohibits unfair methods of competition?

A) Sherman Act
B) Federal Trade Commission Act
C) Robinson-Patman Act
D) Clayton Act
E) none of the above

Question 76

The Antitrust Modernization Commission has proposed material changes in the antitrust laws to accommodate e- commerce market changes.

Question 77

Manufacturers who refuse to deal with discount houses have committed a per se violation of the antitrust laws.

Question 78

There is hardly any cross-elasticity in the gasoline market.

Question 79

Gringo's Restaurant is a small restaurant located in a Mesa, Arizona, neighborhood shopping center that has a grocery store (chain) as its anchor tenant. Carl Williams owns Gringo's and has just negotiated its sale to Wilma Freestone. The covenant not to compete provides that Williams will not open a competing restaurant anywhere within a two-mile radius of Gringo's for a period of two years. The noncompete covenant is:

A) too restrictive and is a violation of the Sherman Act.
B) not subject to review so long as it is part of the sales contract.
C) probably reasonable and enforceable.
D) void

Question 80

A boycott against subcontractors who are cheaper because of safety concerns is still an illegal group boycott.