Question 1

If Happy Cows contractually requires distributors who purchase Happy Cows' milk to also purchase Happy Cows' cream, this is an example of_____ .
A)territorial confinement
B)a requirements contract
C)a tying arrangement
D)exclusive dealing

Accepted Answer

A tying arrangement occurs when a seller requires the buyer to purchase another product or service as a condition of buying the desired product or service. In this case, Happy Cows is requiring distributors to purchase cream as a condition of purchasing their milk, which is an example of a tying arrangement.

Question 2

All of the following are required to make a tying arrangement vulnerable to antitrust prosecution except which one?
A)There must be proof of an actual tie between two products.
B)There must be at least three products involved.
C)There must be some nontrivial amount of commerce affected by the tying contract.
D)The seller must have substantial market power in the market for the tying product.

Accepted Answer

The requirement for there to be at least three products involved is not necessary for a tying arrangement to be vulnerable to antitrust prosecution. The other three requirements are necessary for a tying arrangement to potentially violate antitrust laws.

Question 3

If a grocery store offers a five percent discount to senior citizens, this is an example of and is_______ .
A)price discrimination; always illegal per se
B)conditional sales; always illegal per se
C)conditional sales; only illegal if the practice substantially lessens competition or tends to create a monopoly
D)price discrimination; only illegal if the practice substantially lessens competition or tends to create a monopoly

Accepted Answer

This is an example of price discrimination as the store is offering a discount to a specific group of customers (senior citizens). However, it is not necessarily illegal unless it substantially lessens competition or tends to create a monopoly, which is the case with any form of price discrimination. Therefore, the correct answer is D.

Question 4

All of the following are examples of conditional sales except which one?
A)price discrimination
B)tying arrangements
C)exclusive dealing
D)territorial confinement

Accepted Answer

Price discrimination is not a form of conditional sale. Conditional sales typically involve conditions placed on the buyer by the seller, such as tying arrangements, exclusive dealing, or territorial confinement, which restrict how or where the product can be sold. Price discrimination, however, refers to charging different prices to different consumers for the same product or service, without additional conditions on the sale.

Question 5

Healthy Crunch contractually requires distributors who purchase Healthy Crunch's snack bars to also purchase Healthy Crunch's breakfast cereal. The legality of the practice will be evaluated under Section _____of the Clayton Act.
A)2
B)3
C)7
D)8

Accepted Answer

Section 3 of the Clayton Act addresses exclusive dealings and tying arrangements, which is relevant to the scenario described.

Question 6

If Healthy Crunch contractually requires distributors who purchase Healthy Crunch's snack bars to also purchase Healthy Crunch's breakfast cereal, this is an example of_____ .
A)a requirements contract
B)exclusive dealing
C)a tying arrangement
D)territorial confinement

Accepted Answer

This is an example of a tying arrangement, where the sale of one product is tied to the sale of another product. In this case, distributors must purchase snack bars in order to also purchase breakfast cereal.

Question 7

All of the following are required to make a tying arrangement vulnerable to antitrust prosecution except which one?
A)The seller must have substantial market power in the market for the tying product.
B)There must be at least two products involved.
C)There cannot be proof of an actual tie between two products.
D)There must be proof of an actual tie between two products.

Accepted Answer

The existence of an actual tie between two products is necessary for a tying arrangement to be vulnerable to antitrust prosecution. The other options, such as the seller having substantial market power in the market for the tying product and the involvement of at least two products, are also important factors in determining the vulnerability of a tying arrangement to antitrust prosecution.

Question 8

If a local dairy farm sells its ice cream to a distributor and contractually restricts the distributor from reselling the ice cream outside of the south east, this is an example of _______
A)territorial confinement
B)exclusive dealing
C)a requirements contract
D)a tying arrangement

Accepted Answer

The contractual restriction placed on the distributor limits the geographic scope in which the ice cream can be sold, which is known as territorial confinement. This allows the dairy farm to have control over where their product is being sold and prevents any potential competition with their own sales outside of the designated area.

Question 9

If a cigarette manufacturer sells its cigarettes to a distributor and contractually restricts the distributor from reselling the cigarettes outside the state of New York, this is an example of _____.
A)a tying arrangement
B)a requirements contract
C)territorial confinement
D)exclusive dealing

Accepted Answer

Territorial confinement is a type of vertical restraint in which a manufacturer imposes restrictions on the geographic area in which its product can be resold by the distributor. In this case, the cigarette manufacturer has contractually limited the distributor from reselling the cigarettes outside the state of New York.

Question 10

Conditional sales all involve the_______ relationship between_______ .
A)horizontal; two buyers
B)horizontal; a seller and a buyer
C)vertical; two sellers
D)vertical; a seller and a buyer

Accepted Answer

Conditional sales involve a vertical relationship between a seller and a buyer, where the sale of the good or service is contingent upon certain conditions being met.

Question 11

All of the following are required to make a tying arrangement vulnerable to antitrust prosecution except which one?
A)There must be some nontrivial amount of commerce affected by the tying contract.
B)There must be at least two products involved.
C)The seller cannot have substantial market power in the market for the tying product.
D)There must be proof of an actual tie between two products.

Accepted Answer

For a tying arrangement to be vulnerable to antitrust prosecution, it is not required that the seller lacks substantial market power in the market for the tying product. On the contrary, having substantial market power in the tying product's market is typically a prerequisite for such concerns.

Question 12

A company promotes a 'buy one, get one free' offer such that customers who purchase one unit of the product can get a second unit for free. The legality of the practice will be evaluated under Section _______of the Clayton Act.
A)3
B)8
C)7
D)2

Accepted Answer

Section 2 of the Clayton Act addresses practices related to price discrimination, which can include promotional offers like 'buy one, get one free'. This section is relevant for evaluating the legality of such offers to ensure they do not constitute unfair competition.

Question 13

Happy Cows contractually requires distributors who purchase Happy Cows' milk to also purchase Happy Cows' cream. The legality of the practice will be evaluated under Section_____ of the Clayton Act.
A)3
B)7
C)8
D)2

Accepted Answer

Section 3 of the Clayton Act addresses tying arrangements, which is relevant here as Happy Cows requires distributors to purchase both milk and cream.

Question 14

Business practices affected by the Clayton Act fall into each of these categories except which one?
A)price fixing
B)conditional sales
C)mergers
D)price discrimination

Accepted Answer

The Clayton Act primarily addresses issues related to antitrust and unfair business practices, including conditional sales, mergers, and price discrimination, but it does not directly address price fixing. Price fixing is primarily covered under the Sherman Antitrust Act.

Question 15

A popular shoe company has a 'buy one, get one half price' offer in which customers who purchase one pair of shoes can purchase a second pair at half price. This is an example of_______ and is_______ .
A)price discrimination; only illegal if the practice substantially lessens competition or tends to create a monopoly
B)conditional sales; only illegal if the practice substantially lessens competition or tends to create a monopoly
C)conditional sales; always illegal per se
D)price discrimination; always illegal per se

Accepted Answer

This offer is an example of price discrimination, as it offers a different price for two different items. However, it is only illegal if it substantially lessens competition or tends to create a monopoly, which is not necessarily the case in this scenario.

Question 16

Healthy Nuts contractually requires distributors who purchase Healthy Nuts' snack packs to also purchase Healthy Nuts' large- sized mixed nuts tins. The legality of the practice will be evaluated under Section_____ of the Clayton Act.
A)8
B)7
C)2
D)3

Accepted Answer

This practice is evaluated under Section 3 of the Clayton Act, which addresses exclusive dealings and tying arrangements that may substantially lessen competition or tend to create a monopoly.

Question 17

If Healthy Nuts contractually requires distributors who purchase Healthy Nuts' snack packs to also purchase Healthy Nuts' large- sized mixed nuts tins, this is an example of _____.
A)a requirements contract
B)exclusive dealing
C)a tying arrangement
D)territorial confinement

Accepted Answer

This is an example of a tying arrangement, where Healthy Nuts is requiring distributors to purchase both their snack packs and large-sized mixed nuts tins. This is a form of anti-competitive behavior that can limit market competition and harm consumers.

Question 18

If a company offers a discounted price to college students, the legality of the practice will be evaluated under Section_______ of the Clayton Act.
A)2
B)3
C)8
D)7

Accepted Answer

The legality of offering discounted prices to college students will be evaluated under Section 2 of the Clayton Act, which addresses monopolization and attempts to monopolize. This is because the discount could potentially be seen as a form of price discrimination that harms competition in the relevant market.

Question 19

Mr. Shades Sunglasses promotes its 'buy one, get one half price' offer in which customers who purchase one pair of sunglasses can purchase a second pair at half price. This is an example of _______and is _______.
A)conditional sales; only illegal if the practice substantially lessens competition or tends to create a monopoly
B)conditional sales; always illegal per se
C)price discrimination; always illegal per se
D)price discrimination; only illegal if the practice substantially lessens competition or tends to create a monopoly

Accepted Answer

The answer of Mr. Shades Sunglasses promotes its 'buy one,...

Question 20

If a large hardware chain offers a ten percent discount to those currently serving in the military and veterans, this is an example of ________ and is_______ .
A)price discrimination; only illegal if the practice substantially lessens competition or tends to create a monopoly
B)price discrimination; always illegal per se
C)conditional sales; only illegal if the practice substantially lessens competition or tends to create a monopoly
D)conditional sales; always illegal per se

Accepted Answer

This is an example of price discrimination, which is not always illegal. In this case, it is only illegal if it substantially lessens competition or tends to create a monopoly. However, offering a discount to a specific group based on their status is still considered price discrimination. Conditional sales are not relevant in this scenario.

Quiz 9: A Managers Guide to Antitrust Policy

If Happy Cows contractually requires distributors who purchase Happy Cows' milk to also purchase Happy Cows' cream, this is an example of_____ .

All of the following are required to make a tying arrangement vulnerable to antitrust prosecution except which one?

If a grocery store offers a five percent discount to senior citizens, this is an example of and is_______ .

All of the following are examples of conditional sales except which one?

Healthy Crunch contractually requires distributors who purchase Healthy Crunch's snack bars to also purchase Healthy Crunch's breakfast cereal. The legality of the practice will be evaluated under Section _____of the Clayton Act.

If Healthy Crunch contractually requires distributors who purchase Healthy Crunch's snack bars to also purchase Healthy Crunch's breakfast cereal, this is an example of_____ .

All of the following are required to make a tying arrangement vulnerable to antitrust prosecution except which one?

If a local dairy farm sells its ice cream to a distributor and contractually restricts the distributor from reselling the ice cream outside of the south east, this is an example of _______

If a cigarette manufacturer sells its cigarettes to a distributor and contractually restricts the distributor from reselling the cigarettes outside the state of New York, this is an example of _____.

Conditional sales all involve the_ relationship between_ .

All of the following are required to make a tying arrangement vulnerable to antitrust prosecution except which one?

A company promotes a 'buy one, get one free' offer such that customers who purchase one unit of the product can get a second unit for free. The legality of the practice will be evaluated under Section _______of the Clayton Act.

Happy Cows contractually requires distributors who purchase Happy Cows' milk to also purchase Happy Cows' cream. The legality of the practice will be evaluated under Section_____ of the Clayton Act.

Business practices affected by the Clayton Act fall into each of these categories except which one?

A popular shoe company has a 'buy one, get one half price' offer in which customers who purchase one pair of shoes can purchase a second pair at half price. This is an example of_ and is_ .

Healthy Nuts contractually requires distributors who purchase Healthy Nuts' snack packs to also purchase Healthy Nuts' large- sized mixed nuts tins. The legality of the practice will be evaluated under Section_____ of the Clayton Act.

If Healthy Nuts contractually requires distributors who purchase Healthy Nuts' snack packs to also purchase Healthy Nuts' large- sized mixed nuts tins, this is an example of _____.

If a company offers a discounted price to college students, the legality of the practice will be evaluated under Section_______ of the Clayton Act.

Mr. Shades Sunglasses promotes its 'buy one, get one half price' offer in which customers who purchase one pair of sunglasses can purchase a second pair at half price. This is an example of _and is _.

If a large hardware chain offers a ten percent discount to those currently serving in the military and veterans, this is an example of __ and is_ .