Question 1

To avoid a rule- of- reason violation, the manager of a designer handbag firm should not undertake which of these actions without first speaking to an attorney?
A)enter into an agreement with another designer handbag firm to set the price of the handbags
B)enter into an agreement with another designer handbag firm not to sell to a particular customer
C)enter into an agreement with a distributor about the minimum price the distributor can resell the handbags
D)enter into an agreement with another designer handbag firm to only sell in certain areas of the world

Accepted Answer

The answer of To avoid a rule- of- reason violation,...

Question 2

If a horizontal merger between two rival firms reduces competition, all of the following are possible except which one?
A)The managers could face personal fines.
B)The firms could face civil penalties.
C)The firms could face criminal fines.
D)The managers could face personal fines, but could not be imprisoned.

Accepted Answer

While civil and criminal penalties may be imposed on the firms for reducing competition through a horizontal merger, the managers cannot be imprisoned for antitrust violations. They may face personal fines, but not imprisonment.

Question 3

The manager of Healthy Bars should avoid all of the following topics except which one when speaking to managers of Healthy Snacks, a competitor firm?
A)the planned production amounts of Healthy Crunch, another competitor firm
B)Healthy Bars planned production amounts
C)Healthy Bars pricing policy
D)a news report announcing the benefits of healthy eating

Accepted Answer

Discussing a news report about the benefits of healthy eating is a general topic that does not involve sharing sensitive competitive information like production amounts or pricing policies. It's a safe subject that doesn't compromise the competitive position of Healthy Bars.

Question 4

Big Roads and Big Pavers are two competing road construction firms. The managers of these two firms should never undertake all of the following actions except which one?
A)agree to submit a high bid on a contract
B)share information and experiences from implementing new government safety standards
C)agree to submit a low bid on a contract
D)agree to the number of contracts the firms will bid on

Accepted Answer

Sharing information and experiences from implementing new government safety standards is a collaborative action that can improve industry practices and safety without necessarily involving anti-competitive behavior or collusion. The other options (A, C, D) involve agreements that could restrict competition and are generally considered illegal under antitrust laws.

Question 5

If two firms located in the United States sell their products in the United States and in the European Union, the possible merger of the two firms could not be examined by the European Union competition authorities.

Accepted Answer

The European Union competition authorities can examine mergers that affect the EU market, even if the firms are located outside the EU, to ensure competition is not adversely affected within the EU.

Question 6

To avoid a rule- of- reason violation, the manager of a designer women's clothing firm should not undertake which of these actions without first speaking to an attorney?
A)enter into an agreement with another designer women's clothing firm to set the price of the clothing
B)enter into an agreement with another designer women's clothing firm to only sell in certain areas of the world
C)enter into an agreement with a distributor about the minimum price the distributor can resell the clothing
D)enter into an agreement with another designer women's clothing firm not to sell to a particular customer

Accepted Answer

The answer of To avoid a rule- of- reason violation,...

Question 7

In reference to worldwide competition laws, each of the following are fundamentally prohibited or highly suspicious among regulators across almost all countries except which one?
A)dominant firms
B)creation of cartels
C)charging unfairly high prices
D)monopolies

Accepted Answer

Charging unfairly high prices is not fundamentally prohibited or highly suspicious among regulators across almost all countries.

Question 8

If a firm located outside of China violates China's Anti- monopoly Law, China prosecute the firm______ .
A)cannot; if the firm's behavior affects the markets within China
B)can; if the firm's behavior affects the markets within China
C)can; regardless of whether or not the firm's behavior affects the markets within China
D)cannot; regardless of whether or not the firm's behavior affects the markets within China

Accepted Answer

China can prosecute a firm outside of China if the firm's behavior affects the markets within China, according to China's Anti-monopoly Law. Therefore, option B is the correct answer.

Question 9

Both the United States and the European Union consider resale price maintenance to be illegal per se.

Accepted Answer

In the United States, resale price maintenance is not considered illegal per se; it is evaluated under the rule of reason, a legal standard that assesses its competitive effects. In contrast, the European Union generally considers resale price maintenance to be a restriction of competition by object and thus illegal, but there are exceptions and specific circumstances under which it might not be.

Question 10

All of the following actions are potential rule- of- reason violations except which one?
A)a tying sale with a customer
B)an agreement with a competitor firm to divide the market
C)a firm's agreement with a customer about the resale price of its product
D)a firm's agreement with a customer about the markets in which the customer is allowed to resell the product

Accepted Answer

An agreement with a competitor firm to divide the market is considered a per se violation of antitrust laws, not a rule-of-reason violation.

Question 11

Each member of the European Union (EU)has its own national competition laws in addition to the EU competition laws.

Accepted Answer

Each member state of the EU has its own national competition laws, but they must also follow the EU competition laws as they are applicable to all EU member states.

Question 12

Unlike the European Union competition laws, Chinese Anti- monopoly Law considers which of the following?
A)exclusive deals
B)tying contracts
C)charging unfairly high prices
D)furthering the social interest

Accepted Answer

Chinese Anti-monopoly Law is unique in that it includes provisions aimed at furthering social interest, in addition to regulating monopolistic behaviors. This reflects a broader approach to competition law that incorporates social and economic policy goals.

Question 13

The manager of Happy Chickens, an organic egg producer, should avoid all of the following topics except which one when speaking to managers of Best Eggs, a competitor firm?
A)forthcoming changes in Happy Eggs', a competitor firm's, pricing
B)Happy Chickens' planned production amounts
C)the planned production amounts of Happy Eggs, a competitor firm
D)a new report linking egg consumption with increased heart health in adults

Accepted Answer

The manager of Happy Chickens should avoid discussing the new report about egg consumption and heart health because it is not relevant to the competition between Happy Chickens and Best Eggs. Discussing the production amounts and pricing of both firms could potentially give information to Best Eggs that they could use to their advantage.

Question 14

Big Roads and Big Pavers are two competing road construction firms. The managers of these two firms should never undertake all of the following actions except which one?
A)adjust the amount they bid on a government road contract
B)share information and experiences from implementing new government safety standards
C)agree to not submit a bid on a government road contract
D)agree to only operate in a specific area of the country

Accepted Answer

Sharing information and experiences from implementing new government safety standards is a collaborative action that can improve industry practices and safety without necessarily involving anti-competitive behavior. The other options (A, C, D) involve actions that could distort competition, such as price fixing, bid rigging, or market division, which are generally illegal and unethical in many jurisdictions.

Question 15

If Sail Away has 15 percent of the market share, Easy Sails has a 30 percent market share, and Big Sails has a market share of 40 percent, according to Chinese law, which of the firm(s)is considered to be a dominant firm?
A)Big Sails and Easy Sails, but not Sail Away
B)Easy Sails, but not Sail Away or Big Sails
C)Big Sails, but not Sail Away or Easy Sails
D)Sail Away, Easy Sails, and Big Sails

Accepted Answer

The answer of If Sail Away has 15 percent of...

Question 16

The manager of Healthy Bars should avoid all of the following topics except which one when speaking to managers of Healthy Snacks, a competitor firm?
A)new government safety regulations for packaging snack foods
B)a forthcoming change in Healthy Bars' pricing policy
C)the planned production amounts of Healthy Crunch, another competitor firm
D)Healthy Bars' intent to bid on a government contract to supply public schools with healthy snack foods

Accepted Answer

Discussing new government safety regulations for packaging snack foods is appropriate as it pertains to industry-wide standards and compliance, which is not competitive or proprietary information.

Question 17

The manager of Happy Chickens, an organic egg producer, should avoid all of the following topics except which one when speaking to managers of Best Eggs, a competitor firm?
A)Happy Chickens' planned production amounts
B)forthcoming changes in Happy Chickens' pricing policies
C)a recent medical report documenting the health benefits from eggs
D)Happy Chickens' intent to bid on a large government contract to supply eggs to public schools

Accepted Answer

The manager of Happy Chickens should avoid discussing forthcoming changes in pricing policies, planned production amounts, and intent to bid on a large government contract with Best Eggs as these are all sensitive business information that could give their competitor an advantage. However, discussing a recent medical report documenting the health benefits from eggs is harmless and could even benefit both firms in promoting the consumption of eggs.

Question 18

The European Union competition laws strongly support the free- market system by allowing firms to charge a high price or buy at a low price regardless of the market structure.

Accepted Answer

The European Union competition laws advocate for fair competition and preventing anti-competitive behavior, such as abuse of dominant market power or collusion, to ensure the efficient functioning of the market and protect consumer welfare. They do not support firms charging high prices or engaging in predatory pricing practices.

Question 19

Price fixing and market division are illegal per se in the United States and effectively illegal per se in the European Union.

Accepted Answer

Price fixing and market division are considered anti-competitive behavior and are prohibited by antitrust laws in the United States and the European Union. Both jurisdictions consider them to be illegal per se, meaning that they are automatically and categorically illegal without any need for further analysis of their effects on competition.

Question 20

If Happy Campers has a market share of 70 percent and Campers R Us has a market share of 5 percent, according to Chinese law, Happy Campers______ be considered a dominant firm and Campers R Us ________ be considered a dominant firm.
A)would not; would
B)would; would
C)would; would not
D)would not; would not

Accepted Answer

The answer of If Happy Campers has a market share...

Quiz 9: A Managers Guide to Antitrust Policy

To avoid a rule- of- reason violation, the manager of a designer handbag firm should not undertake which of these actions without first speaking to an attorney?

If a horizontal merger between two rival firms reduces competition, all of the following are possible except which one?

The manager of Healthy Bars should avoid all of the following topics except which one when speaking to managers of Healthy Snacks, a competitor firm?

Big Roads and Big Pavers are two competing road construction firms. The managers of these two firms should never undertake all of the following actions except which one?

If two firms located in the United States sell their products in the United States and in the European Union, the possible merger of the two firms could not be examined by the European Union competition authorities.

To avoid a rule- of- reason violation, the manager of a designer women's clothing firm should not undertake which of these actions without first speaking to an attorney?

In reference to worldwide competition laws, each of the following are fundamentally prohibited or highly suspicious among regulators across almost all countries except which one?

If a firm located outside of China violates China's Anti- monopoly Law, China prosecute the firm______ .

Both the United States and the European Union consider resale price maintenance to be illegal per se.

All of the following actions are potential rule- of- reason violations except which one?

Each member of the European Union (EU)has its own national competition laws in addition to the EU competition laws.

Unlike the European Union competition laws, Chinese Anti- monopoly Law considers which of the following?

The manager of Happy Chickens, an organic egg producer, should avoid all of the following topics except which one when speaking to managers of Best Eggs, a competitor firm?

Big Roads and Big Pavers are two competing road construction firms. The managers of these two firms should never undertake all of the following actions except which one?

If Sail Away has 15 percent of the market share, Easy Sails has a 30 percent market share, and Big Sails has a market share of 40 percent, according to Chinese law, which of the firm(s) is considered to be a dominant firm?

The manager of Healthy Bars should avoid all of the following topics except which one when speaking to managers of Healthy Snacks, a competitor firm?

The manager of Happy Chickens, an organic egg producer, should avoid all of the following topics except which one when speaking to managers of Best Eggs, a competitor firm?

The European Union competition laws strongly support the free- market system by allowing firms to charge a high price or buy at a low price regardless of the market structure.

Price fixing and market division are illegal per se in the United States and effectively illegal per se in the European Union.

If Happy Campers has a market share of 70 percent and Campers R Us has a market share of 5 percent, according to Chinese law, Happy Campers be considered a dominant firm and Campers R Us __ be considered a dominant firm.