Question 1

Which of the following actions should be discussed with an attorney before undertaking as the action could be considered legal?

Accepted Answer

The answer of Which of the following actions should be...

Question 2

Which of the following actions should be discussed with an attorney before undertaking as the action could be considered legal?

Accepted Answer

The answer of Which of the following actions should be...

Question 3

If a software company enters into an agreement with its distributors to only resell its software in 5 specific states, under United States antitrust laws, this agreement is illegal per se.

Accepted Answer

This agreement would not necessarily be illegal per se under United States antitrust laws. However, it may be subject to scrutiny under antitrust laws if it has anti-competitive effects or may lead to market power concentration in those specific states. It would depend on the specific details of the agreement and its potential impact on competition in the relevant market.

Question 4

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

Accepted Answer

Agreeing with a competitor to adjust output levels is a clear violation of antitrust laws as it involves an agreement to control production, which can lead to price fixing and decreased competition. However, the other three actions listed can potentially be legal if they do not have anti-competitive effects. For example, a resale price maintenance agreement with a customer may be legal if it promotes inter-brand competition and benefits consumers.

Question 5

Which of the following actions should be discussed with an attorney before undertaking as the action could be considered legal?

Accepted Answer

Resale price maintenance agreements can be legal under certain conditions, but they are complex and can raise antitrust concerns, so it's advisable to consult with an attorney.

Question 6

If a luxury handbag firm enters into an agreement with its distributors by setting the minimum price its distributors can resell its handbags, United States antitrust agencies could examine this agreement using the rule- of- reason.

Accepted Answer

The rule-of-reason is a legal standard used by United States antitrust agencies to examine vertical restraints, such as minimum price agreements between manufacturers and distributors. The agencies would evaluate whether the agreement unreasonably restrains trade or promotes competition. Therefore, if a luxury handbag firm enters into an agreement with its distributors by setting the minimum price its distributors can resell its handbags, it would be subject to examination under the rule-of-reason.

Question 7

The legality of which of the following actions would be determined using the rule- of- reason?

Accepted Answer

An exclusive dealings contract with a customer would be subject to the rule-of-reason analysis as it involves an agreement between two parties that may or may not have anticompetitive effects. The other options involve agreements or arrangements with competitor firms, which would be subject to antitrust scrutiny under other legal standards such as per se illegality or the rule of reason with a stricter standard.

Question 8

If a software company charges different prices for its product in different areas of the United States, under United States antitrust laws, this agreement is illegal per se.

Accepted Answer

Different pricing strategies in different areas of the country are not necessarily illegal under antitrust laws, unless they involve collusion or other anticompetitive conduct. In general, pricing is considered a legitimate business decision, and companies are allowed to charge different prices based on factors such as local market conditions, production costs, and competitive pressures. However, if the pricing strategy is part of a broader anticompetitive scheme, such as price-fixing or market allocation, it would be illegal per se.

Question 9

The legality of which of the following actions would be determined using the rule- of- reason?

Accepted Answer

The rule-of-reason is a legal doctrine used to evaluate the legality of certain business practices based on their actual impact on competition. Among the options, an agreement with a customer about the markets in which the customer is allowed to resell the product (D) is most likely to be evaluated under this standard, as it involves assessing whether the restriction enhances or suppresses market competition. Agreements to set prices or manipulate bids (A, B, C) are typically considered per se illegal under antitrust laws, meaning they are automatically deemed to violate the law without a detailed examination of their effects on competition.

Question 10

Even if a firm is found guilty of price fixing, after paying all imposed fines, it is still possible for the firm to earn positive economic profit from the price fixing scheme.

Accepted Answer

The firm may still earn positive economic profit from the price fixing scheme because the increased price resulting from the scheme can lead to higher revenue and profits for the firm, even after paying fines. However, this is illegal and unethical behavior and can harm consumers and other competing firms.

Question 11

A manager of a firm located in the United States that sells some of its products abroad needs to comply only with United States antitrust law as the firm is only bound by the laws of the country in which it is located.

Accepted Answer

The manager of a firm located in the United States that sells some of its products abroad needs to comply with both United States antitrust law and the antitrust laws of the countries in which it sells its products. The firm is subject to the antitrust laws of each country in which it conducts business.

Question 12

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

Accepted Answer

Agreements between competitors not to bid on a contract are generally considered per se violations of antitrust laws, rather than being analyzed under the rule of reason. The rule of reason is a legal standard used to determine whether a business practice is anticompetitive, considering the circumstances and its actual impact on competition, whereas per se violations are deemed inherently illegal regardless of their actual effect on the market.

Question 13

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

Accepted Answer

All of the other actions listed can potentially violate rule of reason analysis.

A) An agreement with a customer about the resale price the customer will charge for the product can be considered price-fixing and can violate rule of reason analysis.

C) An exclusive dealings contract with a customer can be anti-competitive if it forecloses other potential competitors from the market.

D) An agreement with a customer about the markets in which the customer is allowed to resell the product can also limit competition in certain markets.

B) However, an agreement with a competitor firm to not sell to a particular customer does not involve any cooperation or agreement to restrain competition, and thus does not violate the rule of reason analysis.

Question 14

Which of the following actions should be discussed with an attorney before undertaking as the action could be considered legal?

Accepted Answer

The answer of Which of the following actions should be...

Question 15

The legality of which of the following actions would be determined using the rule- of- reason?

Accepted Answer

Exclusive dealings contracts with a customer are typically evaluated using the rule-of-reason approach. This legal standard assesses whether the contract's potential anti-competitive effects are outweighed by its pro-competitive benefits.

Quiz 9: A Managers Guide to Antitrust Policy

Which of the following actions should be discussed with an attorney before undertaking as the action could be considered legal?

Which of the following actions should be discussed with an attorney before undertaking as the action could be considered legal?

If a software company enters into an agreement with its distributors to only resell its software in 5 specific states, under United States antitrust laws, this agreement is illegal per se.

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

Which of the following actions should be discussed with an attorney before undertaking as the action could be considered legal?

If a luxury handbag firm enters into an agreement with its distributors by setting the minimum price its distributors can resell its handbags, United States antitrust agencies could examine this agreement using the rule- of- reason.

The legality of which of the following actions would be determined using the rule- of- reason?

If a software company charges different prices for its product in different areas of the United States, under United States antitrust laws, this agreement is illegal per se.

The legality of which of the following actions would be determined using the rule- of- reason?

Even if a firm is found guilty of price fixing, after paying all imposed fines, it is still possible for the firm to earn positive economic profit from the price fixing scheme.

A manager of a firm located in the United States that sells some of its products abroad needs to comply only with United States antitrust law as the firm is only bound by the laws of the country in which it is located.

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

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

Which of the following actions should be discussed with an attorney before undertaking as the action could be considered legal?

The legality of which of the following actions would be determined using the rule- of- reason?