Question 1

Earthgrown Flora, Inc., is one of many producers of cut flowers. Earthgrown refuses to sell its products to Florist Shops Corporation. Under antitrust law, this refusal is most likely​

Accepted Answer

Under antitrust law, a seller has the right to refuse to deal with a particular buyer as long as it is not done for anticompetitive reasons. Therefore, Earthgrown's refusal to sell its products to Florist Shops Corporation is not a violation of antitrust law.

Question 2

To prevent its competitors from obtaining sufficient supplies to make their products, Continental Steel, Inc., uses its market power to increase the prices of those supplies. This is​

Accepted Answer

The answer of To prevent its competitors from obtaining sufficient...

Question 3

HVAC Parts Company charges different buyers different prices for identical goods. HVAC's prices are subject to evaluation under​

Accepted Answer

The Clayton Act prohibits price discrimination, which is the practice of charging different prices to different buyers for identical goods. Therefore, HVAC's prices can be evaluated under the Clayton Act.

Question 4

Pump Makers Inc. makes pumps for fire trucks and conditions shipments of its products to Quality Motors Corporation-a maker of fire trucks-on Quality's agreement to buy additional pumps only from Pump Makers. This is​

Accepted Answer

This agreement is an example of an exclusive-dealing contract, where Quality Motors agrees to purchase all additional pumps only from Pump Makers Inc. This type of agreement can be anticompetitive and potentially violate antitrust laws, as it limits competition and market access for other pump manufacturers.

Question 5

Domestic Oil Company joins with a foreign cartel to control the price of oil. The cartel has a substantial effect on U.S. commerce. A suit for violation of U.S. antitrust laws can be brought against​

Accepted Answer

The answer of Domestic Oil Company joins with a foreign...

Question 6

Under what circumstances would Small's Market, a little store in Rustic, an isolated town, be considered a monopoly? If Small's Market is a monopoly, is it in violation of antitrust law?​

Accepted Answer

The answer of Under what circumstances would Small's Market, a...

Question 7

Clear View Corporation offers to sell its flat-panel display monitors to Best Computer & Video, Inc., only if Best agrees to buy Clear View's servicing of its products along with the monitors. This is

Accepted Answer

This is a tying arrangement because Clear View is requiring Best to purchase its product servicing in addition to the monitors.

Question 8

Grip-All Tires, Inc., conditions the sale of one of its products on Harvey's Service Stores agreeing to buy another of Grip-All's products. This deal is legal​

Accepted Answer

The legality of this deal depends on its purpose and the effect on competition. If the purpose is to harm or eliminate a competitor, or if the effect is to substantially lessen competition, it would be illegal under antitrust laws. However, if the purpose is to promote efficiency or if there is no effect on competition, it would likely be legal.

Question 9

By contract, Oil Shale Corporation forbids Petro Refining, Inc., a wholesale buyer of Oil Shale's products, from purchasing the products of its competitors. This exclusive-dealing contract is not permitted​

Accepted Answer

Exclusive-dealing contracts that are made to substantially lessen competition are prohibited by antitrust laws. Such contracts are violations of Section 3 of the Clayton Act, which prohibits exclusive dealing that may substantially lessen competition or create a monopoly. Therefore, option C is the correct answer. The other options - A, B, and D - are incorrect because they do not accurately reflect the legal standard for determining the legality of exclusive-dealing contracts.

Question 10

To drive its competitors out of a certain geographic segment of its market, Drone Drives, Inc., sets the prices of its products below cost for the buyers in that area. This is​

Accepted Answer

The answer of To drive its competitors out of a...

Question 11

Precision Parts Corporation and Aligned Gears, Inc., are competitors selling certain machine parts that are otherwise generally unattainable in their geographic market. This market includes the states of Minnesota, North Dakota, and South Dakota. Precision Parts and Aligned Gears agree that Precision Parts will no longer sell in Minnesota and that Aligned Gears will no longer sell in North and South Dakota. Have Precision Parts and Aligned Gears violated any antitrust law? If so, which one? Explain. If they had divided their market by type of customer rather than geographic are, would the result be the same? Why or why not?​

Accepted Answer

The answer of Precision Parts Corporation and Aligned Gears, Inc.,...

Question 12

Gaucho Ranchland Supplies Corporation believes that Vaquero Stock & Equipment Corporation engages in anticompetitive behavior in an attempt to drive Gaucho, its chief competitor, out of the market. Antitrust laws can be enforced against Vaquero by​

Accepted Answer

Antitrust laws allow competitors to sue each other for antitrust violations, so Gaucho can bring an antitrust suit against Vaquero seeking damages and injunctive relief. However, a disinterested third party or Congress cannot enforce antitrust laws against Vaquero.

Quiz 31: Antitrust Law and Promoting Competition

Earthgrown Flora, Inc., is one of many producers of cut flowers. Earthgrown refuses to sell its products to Florist Shops Corporation. Under antitrust law, this refusal is most likely​

To prevent its competitors from obtaining sufficient supplies to make their products, Continental Steel, Inc., uses its market power to increase the prices of those supplies. This is​

HVAC Parts Company charges different buyers different prices for identical goods. HVAC's prices are subject to evaluation under​

Pump Makers Inc. makes pumps for fire trucks and conditions shipments of its products to Quality Motors Corporation-a maker of fire trucks-on Quality's agreement to buy additional pumps only from Pump Makers. This is​

Domestic Oil Company joins with a foreign cartel to control the price of oil. The cartel has a substantial effect on U.S. commerce. A suit for violation of U.S. antitrust laws can be brought against​

Under what circumstances would Small's Market, a little store in Rustic, an isolated town, be considered a monopoly? If Small's Market is a monopoly, is it in violation of antitrust law?​

Clear View Corporation offers to sell its flat-panel display monitors to Best Computer & Video, Inc., only if Best agrees to buy Clear View's servicing of its products along with the monitors. This is

Grip-All Tires, Inc., conditions the sale of one of its products on Harvey's Service Stores agreeing to buy another of Grip-All's products. This deal is legal​

By contract, Oil Shale Corporation forbids Petro Refining, Inc., a wholesale buyer of Oil Shale's products, from purchasing the products of its competitors. This exclusive-dealing contract is not permitted​

To drive its competitors out of a certain geographic segment of its market, Drone Drives, Inc., sets the prices of its products below cost for the buyers in that area. This is​

Gaucho Ranchland Supplies Corporation believes that Vaquero Stock & Equipment Corporation engages in anticompetitive behavior in an attempt to drive Gaucho, its chief competitor, out of the market. Antitrust laws can be enforced against Vaquero by​

Earthgrown Flora, Inc., is one of many producers of cut flowers. Earthgrown refuses to sell its products to Florist Shops Corporation. Under antitrust law, this refusal is most likely

To prevent its competitors from obtaining sufficient supplies to make their products, Continental Steel, Inc., uses its market power to increase the prices of those supplies. This is

HVAC Parts Company charges different buyers different prices for identical goods. HVAC's prices are subject to evaluation under

Pump Makers Inc. makes pumps for fire trucks and conditions shipments of its products to Quality Motors Corporation-a maker of fire trucks-on Quality's agreement to buy additional pumps only from Pump Makers. This is

Domestic Oil Company joins with a foreign cartel to control the price of oil. The cartel has a substantial effect on U.S. commerce. A suit for violation of U.S. antitrust laws can be brought against

Under what circumstances would Small's Market, a little store in Rustic, an isolated town, be considered a monopoly? If Small's Market is a monopoly, is it in violation of antitrust law?

Grip-All Tires, Inc., conditions the sale of one of its products on Harvey's Service Stores agreeing to buy another of Grip-All's products. This deal is legal

By contract, Oil Shale Corporation forbids Petro Refining, Inc., a wholesale buyer of Oil Shale's products, from purchasing the products of its competitors. This exclusive-dealing contract is not permitted

To drive its competitors out of a certain geographic segment of its market, Drone Drives, Inc., sets the prices of its products below cost for the buyers in that area. This is

Gaucho Ranchland Supplies Corporation believes that Vaquero Stock & Equipment Corporation engages in anticompetitive behavior in an attempt to drive Gaucho, its chief competitor, out of the market. Antitrust laws can be enforced against Vaquero by