Question 1

Rugged Bikes, Inc., makes and distributes Rugged-brand bicycles and accessories to authorized dealers, including Super Sports Stores, Inc. Super Sports operates dealerships in several locations. To insulate other dealers from direct competition, Rugged Bikes imposes limits on where Super Sports can sell Rugged products. This is​

Accepted Answer

Rugged Bikes is imposing limits on where Super Sports can sell Rugged products, which is a form of territorial restriction.

Question 2

Spa Selectiva Company makes and sells beauty salon supplies. By selling its product at prices substantially below the normal cost of production, Spa Selectiva hopes to drive its competitors from the market. This is​

Accepted Answer

Spa Selectiva is engaging in predatory pricing, which involves charging prices lower than the cost of production in order to drive competitors out of business. This is considered an anti-competitive practice and is illegal under many competition laws.

Question 3

A suit is filed against AgriSeeds Corporation, alleging that the firm committed the offense of monopolization. To determine whether AgriSeeds has monopoly power requires looking at​

Accepted Answer

To determine whether AgriSeeds has monopoly power requires looking at the relevant market. Monopoly power cannot be determined solely by the company's size or marketing techniques; it must be evaluated relative to the market in which the company operates. Analysis of the relevant market includes consideration of the product or service in question, geographic location, and potential substitutes.

Question 4

Pads & Pods Corporation requires all distributors of its products to sell the products at specified minimum prices. This resale price maintenance agreement is​

Accepted Answer

Resale price maintenance agreements are evaluated under the rule of reason, which involves a balancing of the pro-competitive benefits against the potential anticompetitive effects. It is not a per se violation of antitrust law, but it is also not exempt from antitrust law.

Question 5

Fiesta Food Company, Gourmet Cheeses, Inc., and Healthy Eats, Inc. agree to exchange information and share advertising. This trade association agreement is​

Accepted Answer

This type of agreement would require analysis under the rule of reason to determine whether it harms competition or restricts trade. It is not inherently illegal, nor is it a per se violation of antitrust law.

Question 6

Soft Drink Corporation is charged with violating the Sherman Act through conduct subject to the rule of reason. When applying the rule of reason in this situation, a court will not consider​

Accepted Answer

The rule of reason analysis focuses on the potential effects of the agreement on competition, the parties' market power, and consumer welfare. The purpose of the agreement and its effect on international trade are not relevant factors in the analysis.

Question 7

An antitrust action is brought against Carrier Transport Company, alleging the offense of attempted monopolization. To be guilty of this offense, Carrier's attempt must have​

Accepted Answer

To be guilty of attempted monopolization, the attempt must have a dangerous probability of success. This means that while the attempt may not be guaranteed to succeed, it must have a realistic and significant chance of doing so. Simply having a distant possibility or distinct improbability of success would not meet the criteria for attempted monopolization.

Question 8

Agreements that are deemed per se violations of Section 1 of the Sherman Act include all of the following except​

Accepted Answer

Trade associations, by themselves, are not per se violations of Section 1 of the Sherman Act. However, trade associations may be found to violate the antitrust laws if they engage in anticompetitive behavior such as facilitating illegal coordination among members or promoting collusion. Price-fixing agreements, group boycotts, and market division are all considered per se violations of Section 1 of the Sherman Act.

Question 9

Dredgers, Inc., is the major wholesale distributor of heavy equipment in the state of Georgia. Its closest competitor is Excavators Company, another Georgia firm. The two firms agree that Excavators will operate in southern Georgia and Dredgers will operate in northern Georgia. This is​

Accepted Answer

This is a market division agreement between Dredgers, Inc. and Excavators Company where they agree to operate in different geographical areas and avoid competition with each other.

Question 10

Frictionless Lubricant Corporation and Grease Inc. are the principal suppliers of their product in their market. They agree that Frictionless will sell exclusively to retailers and Grease will sell exclusively to wholesalers. Under antitrust law, this market division is most likely​

Accepted Answer

Market division agreements are considered a per se violation of antitrust law, meaning they are automatically illegal without the need for further analysis.

Question 11

Gearbox, Inc., a manufacturer of vehicle parts, refuses to sell to Motor Repair & Replace, Inc., a national vehicle service firm. Gearbox convinces Cam & Cylinder Company, a competitor, to do the same. This is​

Accepted Answer

This scenario describes a group boycott, where multiple companies boycott a particular customer or supplier.

Question 12

Fact Pattern 31-1
​Bodycare Corporation makes and sells ChemMed, the most prescribed name-brand blood pressure-lowering medication. Deja Vu Drugs, Inc., has the potential to make a generic version of the same drug.
-Refer to Fact Pattern 31-1.Bodycare pays Deja Vu notto sell its product. This is​

Accepted Answer

The answer of Fact Pattern 31-1
​Bodycare Corporation makes and sells...

Question 13

Speedee Snoboards, Inc., refuses to sell its products to Timber Mountain WinterSports Stores, Inc., a retail snowboard dealership. This is

Accepted Answer

Speedee Snoboards, Inc.'s refusal to sell its products to Timber Mountain WinterSports Stores, Inc. is a unilateral refusal to deal.

Question 14

Fresh Vegetables, Inc., a wholesaler, refuses to sell its produce to Good Foods Marketplace, Inc., a retailer. This is​

Accepted Answer

The answer of Fresh Vegetables, Inc., a wholesaler, refuses to...

Question 15

Fact Pattern 31-1
​Bodycare Corporation makes and sells ChemMed, the most prescribed name-brand blood pressure-lowering medication. Deja Vu Drugs, Inc., has the potential to make a generic version of the same drug.
-Refer to Fact Pattern 31-1. A court would most likely rule that the agreement between Bodycare and Deja Vu is​

Accepted Answer

The agreement between Bodycare and Deja Vu to prevent the latter from making a generic version of the drug would likely be considered a per se violation of the Sherman Act, as it directly restrains trade and harms competition by maintaining a monopoly on the drug.

Question 16

To acquire monopoly power in its market, Global Condiments, Inc., sets its prices substantially below the normal costs of production. Under antitrust law, this is​

Accepted Answer

The answer of To acquire monopoly power in its market,...

Question 17

Frozen Confections Corporation makes and sells ice cream under a variety of brand names. Frozen wants to merge with Grocers Products Company, its main competitor. In considering a challenge to the deal, a court looks at the relevant product market. This most likely includes ice cream and​

Accepted Answer

The relevant product market in this case would include products that are reasonably interchangeable, meaning that consumers could switch between various brands of ice cream without significant cost or inconvenience. This would likely include not only various brands of ice cream, but also related products such as frozen yogurt or gelato. The market would not be limited to products with identical attributes, as there can be variation in flavor, texture, and other factors that can differentiate brands within the same product category.

Question 18

Glassworx Corporation has exclusive control over the market for its products. Under antitrust law, this is​

Accepted Answer

Exclusive control over a market through anticompetitive means is a violation of antitrust law. This includes practices like monopolization, predatory pricing, and exclusive dealing agreements that create substantial barriers to entry for competitors. Business judgment alone is not enough to justify exclusive control over a market.

Question 19

Healthcare Device, Inc., has exclusive control over the market for its product. Healthcare Device's market power is most likely​

Accepted Answer

The answer of Healthcare Device, Inc., has exclusive control over...

Question 20

The Association of Organic Food Growers, which does not include all organic farmers and ranchers, refuses to deal with any parties who do not carry the products of its members. This group boycott is​

Accepted Answer

This group boycott is a per se violation of antitrust law as it involves an agreement among competitors to boycott non-members, which is considered inherently anti-competitive.

Quiz 31: Antitrust Law and Promoting Competition

Spa Selectiva Company makes and sells beauty salon supplies. By selling its product at prices substantially below the normal cost of production, Spa Selectiva hopes to drive its competitors from the market. This is

A suit is filed against AgriSeeds Corporation, alleging that the firm committed the offense of monopolization. To determine whether AgriSeeds has monopoly power requires looking at

Pads & Pods Corporation requires all distributors of its products to sell the products at specified minimum prices. This resale price maintenance agreement is

Fiesta Food Company, Gourmet Cheeses, Inc., and Healthy Eats, Inc. agree to exchange information and share advertising. This trade association agreement is

Soft Drink Corporation is charged with violating the Sherman Act through conduct subject to the rule of reason. When applying the rule of reason in this situation, a court will not consider

An antitrust action is brought against Carrier Transport Company, alleging the offense of attempted monopolization. To be guilty of this offense, Carrier's attempt must have

Agreements that are deemed per se violations of Section 1 of the Sherman Act include all of the following except

Dredgers, Inc., is the major wholesale distributor of heavy equipment in the state of Georgia. Its closest competitor is Excavators Company, another Georgia firm. The two firms agree that Excavators will operate in southern Georgia and Dredgers will operate in northern Georgia. This is

Frictionless Lubricant Corporation and Grease Inc. are the principal suppliers of their product in their market. They agree that Frictionless will sell exclusively to retailers and Grease will sell exclusively to wholesalers. Under antitrust law, this market division is most likely

Gearbox, Inc., a manufacturer of vehicle parts, refuses to sell to Motor Repair & Replace, Inc., a national vehicle service firm. Gearbox convinces Cam & Cylinder Company, a competitor, to do the same. This is

Fact Pattern 31-1 Bodycare Corporation makes and sells ChemMed, the most prescribed name-brand blood pressure-lowering medication. Deja Vu Drugs, Inc., has the potential to make a generic version of the same drug. -Refer to Fact Pattern 31-1.Bodycare pays Deja Vu notto sell its product. This is

Speedee Snoboards, Inc., refuses to sell its products to Timber Mountain WinterSports Stores, Inc., a retail snowboard dealership. This is

Fresh Vegetables, Inc., a wholesaler, refuses to sell its produce to Good Foods Marketplace, Inc., a retailer. This is

To acquire monopoly power in its market, Global Condiments, Inc., sets its prices substantially below the normal costs of production. Under antitrust law, this is

Frozen Confections Corporation makes and sells ice cream under a variety of brand names. Frozen wants to merge with Grocers Products Company, its main competitor. In considering a challenge to the deal, a court looks at the relevant product market. This most likely includes ice cream and

Glassworx Corporation has exclusive control over the market for its products. Under antitrust law, this is

Healthcare Device, Inc., has exclusive control over the market for its product. Healthcare Device's market power is most likely

The Association of Organic Food Growers, which does not include all organic farmers and ranchers, refuses to deal with any parties who do not carry the products of its members. This group boycott is

Quiz 31: Antitrust Law and Promoting Competition

Spa Selectiva Company makes and sells beauty salon supplies. By selling its product at prices substantially below the normal cost of production, Spa Selectiva hopes to drive its competitors from the market. This is​

A suit is filed against AgriSeeds Corporation, alleging that the firm committed the offense of monopolization. To determine whether AgriSeeds has monopoly power requires looking at​

Pads & Pods Corporation requires all distributors of its products to sell the products at specified minimum prices. This resale price maintenance agreement is​

Fiesta Food Company, Gourmet Cheeses, Inc., and Healthy Eats, Inc. agree to exchange information and share advertising. This trade association agreement is​

Soft Drink Corporation is charged with violating the Sherman Act through conduct subject to the rule of reason. When applying the rule of reason in this situation, a court will not consider​

An antitrust action is brought against Carrier Transport Company, alleging the offense of attempted monopolization. To be guilty of this offense, Carrier's attempt must have​

Agreements that are deemed per se violations of Section 1 of the Sherman Act include all of the following except​

Dredgers, Inc., is the major wholesale distributor of heavy equipment in the state of Georgia. Its closest competitor is Excavators Company, another Georgia firm. The two firms agree that Excavators will operate in southern Georgia and Dredgers will operate in northern Georgia. This is​

Frictionless Lubricant Corporation and Grease Inc. are the principal suppliers of their product in their market. They agree that Frictionless will sell exclusively to retailers and Grease will sell exclusively to wholesalers. Under antitrust law, this market division is most likely​

Gearbox, Inc., a manufacturer of vehicle parts, refuses to sell to Motor Repair & Replace, Inc., a national vehicle service firm. Gearbox convinces Cam & Cylinder Company, a competitor, to do the same. This is​

Speedee Snoboards, Inc., refuses to sell its products to Timber Mountain WinterSports Stores, Inc., a retail snowboard dealership. This is

Fresh Vegetables, Inc., a wholesaler, refuses to sell its produce to Good Foods Marketplace, Inc., a retailer. This is​

To acquire monopoly power in its market, Global Condiments, Inc., sets its prices substantially below the normal costs of production. Under antitrust law, this is​

Frozen Confections Corporation makes and sells ice cream under a variety of brand names. Frozen wants to merge with Grocers Products Company, its main competitor. In considering a challenge to the deal, a court looks at the relevant product market. This most likely includes ice cream and​

Glassworx Corporation has exclusive control over the market for its products. Under antitrust law, this is​

Healthcare Device, Inc., has exclusive control over the market for its product. Healthcare Device's market power is most likely​

The Association of Organic Food Growers, which does not include all organic farmers and ranchers, refuses to deal with any parties who do not carry the products of its members. This group boycott is​

Spa Selectiva Company makes and sells beauty salon supplies. By selling its product at prices substantially below the normal cost of production, Spa Selectiva hopes to drive its competitors from the market. This is

A suit is filed against AgriSeeds Corporation, alleging that the firm committed the offense of monopolization. To determine whether AgriSeeds has monopoly power requires looking at

Pads & Pods Corporation requires all distributors of its products to sell the products at specified minimum prices. This resale price maintenance agreement is

Fiesta Food Company, Gourmet Cheeses, Inc., and Healthy Eats, Inc. agree to exchange information and share advertising. This trade association agreement is

Soft Drink Corporation is charged with violating the Sherman Act through conduct subject to the rule of reason. When applying the rule of reason in this situation, a court will not consider

An antitrust action is brought against Carrier Transport Company, alleging the offense of attempted monopolization. To be guilty of this offense, Carrier's attempt must have

Agreements that are deemed per se violations of Section 1 of the Sherman Act include all of the following except

Dredgers, Inc., is the major wholesale distributor of heavy equipment in the state of Georgia. Its closest competitor is Excavators Company, another Georgia firm. The two firms agree that Excavators will operate in southern Georgia and Dredgers will operate in northern Georgia. This is

Frictionless Lubricant Corporation and Grease Inc. are the principal suppliers of their product in their market. They agree that Frictionless will sell exclusively to retailers and Grease will sell exclusively to wholesalers. Under antitrust law, this market division is most likely

Gearbox, Inc., a manufacturer of vehicle parts, refuses to sell to Motor Repair & Replace, Inc., a national vehicle service firm. Gearbox convinces Cam & Cylinder Company, a competitor, to do the same. This is

Fresh Vegetables, Inc., a wholesaler, refuses to sell its produce to Good Foods Marketplace, Inc., a retailer. This is

To acquire monopoly power in its market, Global Condiments, Inc., sets its prices substantially below the normal costs of production. Under antitrust law, this is

Frozen Confections Corporation makes and sells ice cream under a variety of brand names. Frozen wants to merge with Grocers Products Company, its main competitor. In considering a challenge to the deal, a court looks at the relevant product market. This most likely includes ice cream and

Glassworx Corporation has exclusive control over the market for its products. Under antitrust law, this is

Healthcare Device, Inc., has exclusive control over the market for its product. Healthcare Device's market power is most likely

The Association of Organic Food Growers, which does not include all organic farmers and ranchers, refuses to deal with any parties who do not carry the products of its members. This group boycott is