Question 1

Price discrimination is unlawful even if it can be justified by differences in production or transportation costs.

Accepted Answer

Price discrimination is not unlawful if it can be justified by differences in production or transportation costs, as these are legitimate reasons for varying prices.

Question 2

The legality of a tying arrangement depends in part on the agreement's likely effect on competition in the relevant markets.

Accepted Answer

This statement is true. The legality of a tying arrangement is determined in part by its impact on competition in the relevant markets. Tying arrangements that limit competition or hinder the development of new products or services in a particular market are generally considered to be anti-competitive and therefore illegal.

Question 3

Laws that regulate economic competition are referred to as

Accepted Answer

Antitrust laws are designed to promote fair competition and prevent monopolies and other practices that restrain trade.

Question 4

Plastic Company and Pliable Inc. agree to abide by the decisions of Polymer Corporation as to their respective levels of production, markets, and prices, effectively reducing competition and increasing profits. This is most likely

Accepted Answer

This arrangement is likely an illegal restraint of trade as it involves collusion to fix prices and reduce competition, which is prohibited under antitrust laws.

Question 5

There are no legislative or constitutional limitations on antitrust enforcement.

Accepted Answer

Antitrust enforcement is subject to legislative and constitutional limitations, as laws and regulations define the scope and methods of enforcement, and actions must comply with constitutional protections.

Question 6

The Clayton Act is aimed at the same practices that are covered by the Sherman Act.

Accepted Answer

The Clayton Act addresses specific practices not covered by the Sherman Act, such as price discrimination, exclusive dealings, and mergers that may lessen competition.

Question 7

The U.S. Department of Justice can prosecute violations of the Sherman Act.

Accepted Answer

The U.S. Department of Justice is responsible for enforcing and prosecuting violations of the Sherman Act, which is a federal antitrust law designed to promote competition and prevent monopolies.

Question 8

Foreign individuals cannot be sued for violations of U.S. antitrust law.

Accepted Answer

Foreign individuals can be sued for violations of U.S. antitrust law if their actions have a substantial effect on U.S. commerce.

Question 9

U.S. antitrust laws do not apply outside U.S. territory.

Accepted Answer

U.S. antitrust laws can apply to conduct outside U.S. territory if it has a substantial effect on U.S. commerce.

Question 10

Competition is not necessarily diminished solely as a result of market concentration.

Accepted Answer

While market concentration may lead to some reduction in competition, there are other factors that can influence competition in a market. For example, innovation, differentiation, and entry of new firms can all increase competition even in markets with high levels of concentration. Therefore, competition cannot be solely determined by market concentration.

Question 11

A seller can always reduce its prices to levels substantially below those charged by its competitors without violating antitrust law.

Accepted Answer

A seller reducing prices substantially below competitors' levels may violate antitrust laws if the intent is to eliminate competition and create a monopoly, known as predatory pricing.

Question 12

Petro Inc. and QualGas Corporation refine and sell natural gas. To limit the supply on the market and thereby raise prices, Petro and QualGas agree to buy "excess" supplies from dealers and "dispose" of it. This is

Accepted Answer

This agreement between Petro Inc. and QualGas Corporation to limit supply and raise prices is a per se violation of the Sherman Act, which prohibits agreements that unreasonably restrain trade, such as price-fixing or market allocation.

Question 13

Under the Clayton Act, a seller can condition the sale of a product on the buyer's promise not to deal in the goods of the seller's competitors.

Accepted Answer

The Clayton Act prohibits certain types of exclusive dealing arrangements, including conditioning the sale of a product on the buyer's promise not to deal in the goods of the seller's competitors, as it can restrict competition and create monopolies.

Question 14

Antirust law is based on the desire to

Accepted Answer

Antirust law is based on the desire to foster competition.

Question 15

One of the most significant violations of antitrust law involves joint efforts by businesspersons to obtain government action.

Accepted Answer

Joint efforts by businesspersons to obtain government action are generally not considered a violation of antitrust law, as antitrust laws primarily address anti-competitive practices like price-fixing, monopolies, and collusion among competitors.

Question 16

Under the Clayton Act, a business firm cannot merge with another unless the effect is to substantially lessen competition.

Accepted Answer

The answer of Under the Clayton Act, a business firm...

Question 17

Under an exclusive-dealing contract , a group of competitors refuse to deal with a particular person or firm.

Accepted Answer

An exclusive-dealing contract is an agreement where a seller requires a buyer to purchase exclusively from them, not involving a group of competitors refusing to deal with a particular person or firm.

Question 18

A private party can sue for damages and fees if the party is injured as a result of a violation of any of the federal antitrust laws.

Accepted Answer

The answer of A private party can sue for damages...

Question 19

The Federal Trade Commission enforces the Sherman Act.

Accepted Answer

The Sherman Act is primarily enforced by the Antitrust Division of the Department of Justice, not the Federal Trade Commission.

Question 20

To fall under the Sherman Act, an activity must substantially affect

Accepted Answer

The Sherman Act applies to activities that substantially affect interstate commerce, which involves trade or commerce between different states.

Quiz 42: Antitrust Law