Question 1

Market power is defined as:

Accepted Answer

Market power refers to the ability of a firm or group of firms to set or influence the price of a product in the market, rather than the ability to produce a superior product, make a profit, evade taxes, or form a co-op. None of the provided choices accurately define market power.

Question 2

A firm's ____ refers to the percentage of the relevant market controlled by the firm.

Accepted Answer

The correct term for the percentage of the relevant market controlled by a firm is "market share," which is not listed among the choices.

Question 3

In Standard Oil v. U.S., the federal government wanted to break up a trust of companies that controlled up to 90 percent of the petroleum products market at the turn of the century. The government relied on which law to force this breakup?

Accepted Answer

The Sherman Antitrust Act, passed in 1890, was the first federal law aimed at preventing monopolies and promoting competition. It prohibits contracts, combinations, and conspiracies to restrain trade or monopolize commerce, and provides the basis for the government's authority to break up monopolies and trusts like Standard Oil.

Question 4

If two firms that were previously in competition with each other merge, the merger is called a(n):

Accepted Answer

When two firms that were previously in competition with each other merge, it is typically referred to as a horizontal merger, not specifically mentioned among the provided options. Therefore, the correct choice is "none of the other choices are correct."

Question 5

To help businesses and regulators assess the antitrust implications of a merger, the Department of Justice and FTC created:

Accepted Answer

The Department of Justice and FTC created merger guidelines to provide a framework for analyzing the likely competitive effects of a merger and evaluating whether those effects are likely to be harmful to consumers. These guidelines are updated from time to time to reflect changes in the market or in economic thinking.

Question 6

The Hart-Scott-Rodino Antitrust Improvements Act requires:

Accepted Answer

The Hart-Scott-Rodino Antitrust Improvements Act requires firms to notify the Antitrust Division of the Department of Justice or the Federal Trade Commission before certain mergers or acquisitions, but none of the specific conditions listed in options A, B, C, or D accurately describe the requirements of the Act. The thresholds and notification periods are not correctly stated in any of the given choices.

Question 7

The Hart-Scott-Rodino Antitrust Improvements Act requires:

Accepted Answer

The Hart-Scott-Rodino Antitrust Improvements Act requires firms to notify the Antitrust Division of the Department of Justice or the Federal Trade Commission at least one month before a planned merger, if there is more than $50 million involved. This notification is required to give the antitrust authorities time to review the merger and determine if it will harm competition in the market.

Question 8

If two firms that were previously in competition with each other merge, the merger is called a:

Accepted Answer

A horizontal merger is a merger in which two companies operating in the same industry and producing the same or similar products or services combine. In this case, two competing firms are merging, and therefore it is a horizontal merger. Vertical mergers involve two companies in the same supply chain, while a complete merger and a competition merger are not commonly used terms in business. A final merger is not a recognized term.

Question 9

The most common result of opposition to a merger, such as the proposed merger of Staples and Office Depot, is that:

Accepted Answer

The answer of The most common result of opposition to...

Question 10

A firm's ____ refers to the percentage of the relevant market controlled by the firm.

Accepted Answer

Market share refers specifically to the percentage of the relevant market controlled by the firm, whereas the other options don't relate directly to a firm's position in the market.

Question 11

Merger guidelines were created by the Department of Justice and the FTC to:

Accepted Answer

Merger guidelines were created by the Department of Justice and the FTC to help businesses and regulators assess the antitrust implications of a merger. These guidelines provide a framework for analyzing the potential competitive effects of a merger and offer insight into how the government is likely to evaluate the transaction. They are not meant to help businesses evade antitrust laws or determine unfair business practices, but rather to provide guidance on how to comply with antitrust laws.

Question 12

Under the ____ two firms that plan to merge must notify the Antitrust Division of the Department of Justice or the Federal Trade Commission at least one month before the planned merger, if there is more than $50 million involved.

Accepted Answer

The answer of Under the ____ two firms that plan...

Question 13

Merger guidelines were created by the Department of Justice and the FTC to:

Accepted Answer

Merger guidelines are designed to provide a framework for evaluating potential mergers and acquisitions to ensure they do not harm competition, rather than to evade laws, determine penalties, or break up monopolies.

Question 14

When two firms merge, they must notify the Antitrust Division of Justice or the FTC of their plan to merge at least:

Accepted Answer

The correct answer is one month before the merger. This is in accordance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which requires parties to certain large mergers and acquisitions to file a detailed notification with the Federal Trade Commission and the Department of Justice and to wait a specified period of time before completing their transaction.

Question 15

A horizontal merger occurs when:

Accepted Answer

A horizontal merger occurs when two or more competitor firms in the same industry agree to merge and become one firm. This type of merger aims to increase the market share, reduce competition, and achieve economies of scale. Combining sales and manufacturing departments (option E) is an example of a vertical merger. The conversion of common to preferred stock (option C) and the decision to incorporate (option D) are not related to horizontal mergers. Option A is incorrect as standard pricing does not necessarily imply a merger.

Question 16

When two firms merge, they must notify the Antitrust Division of Justice or the FTC of their plan to merge under the:

Accepted Answer

The answer of When two firms merge, they must notify...

Question 17

When two firms merge, they must notify the Antitrust Division of Justice or the FTC of their plan to merge under the:

Accepted Answer

The Hart-Scott-Rodino (HSR) Act requires companies to notify the Federal Trade Commission (FTC) and the Antitrust Division of the U.S. Department of Justice and provide information regarding their proposed merger. The purpose of this notification is to allow these agencies to review and analyze the potential impact of the merger on competition in the relevant market(s) and take appropriate action if necessary. The Clayton Act also provides antitrust scrutiny for specific types of mergers and acquisitions, but it does not have a requirement for pre-merger notification like the HSR Act. The Lanham Act, Norris-LaGuardia Act, and Wagner Act do not relate to antitrust regulations or mergers and acquisitions.

Question 18

In Standard Oil v. U.S., the federal government wanted to break up a trust of companies that controlled up to 90 percent of the petroleum products market at the turn of the century. The government charged the trust with:

Accepted Answer

The government charged the trust with monopolization, which means they had exclusive control over the market and restricted competition.

Question 19

The most common result of opposition to a merger, such as the proposed merger of Staples and Office Depot, is that:

Accepted Answer

The most common result of opposition to a merger is that the merger is called off. This can happen because the regulatory authorities block the merger, or because one or both companies decide to withdraw from the proposed merger due to the opposition. Fines or court review may occur in some cases, but they are not as common as the merger being called off.

Question 20

Market power is defined as:

Accepted Answer

Market power refers to the ability of one or more firms to maintain prices above competitive levels for a significant period of time, giving them the ability to influence the market and reap profits.

Quiz 20: Antitrust Law

Market power is defined as:

A firm's ____ refers to the percentage of the relevant market controlled by the firm.

In Standard Oil v. U.S., the federal government wanted to break up a trust of companies that controlled up to 90 percent of the petroleum products market at the turn of the century. The government relied on which law to force this breakup?

If two firms that were previously in competition with each other merge, the merger is called a(n) :

To help businesses and regulators assess the antitrust implications of a merger, the Department of Justice and FTC created:

The Hart-Scott-Rodino Antitrust Improvements Act requires:

The Hart-Scott-Rodino Antitrust Improvements Act requires:

If two firms that were previously in competition with each other merge, the merger is called a:

The most common result of opposition to a merger, such as the proposed merger of Staples and Office Depot, is that:

A firm's ____ refers to the percentage of the relevant market controlled by the firm.

Merger guidelines were created by the Department of Justice and the FTC to:

Under the ____ two firms that plan to merge must notify the Antitrust Division of the Department of Justice or the Federal Trade Commission at least one month before the planned merger, if there is more than $50 million involved.

Merger guidelines were created by the Department of Justice and the FTC to:

When two firms merge, they must notify the Antitrust Division of Justice or the FTC of their plan to merge at least:

A horizontal merger occurs when:

When two firms merge, they must notify the Antitrust Division of Justice or the FTC of their plan to merge under the:

When two firms merge, they must notify the Antitrust Division of Justice or the FTC of their plan to merge under the:

In Standard Oil v. U.S., the federal government wanted to break up a trust of companies that controlled up to 90 percent of the petroleum products market at the turn of the century. The government charged the trust with:

The most common result of opposition to a merger, such as the proposed merger of Staples and Office Depot, is that:

Market power is defined as: