Question 1

Antitrust laws tend to target restraint of trade as characterized by .

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Question 2

How did the Clayton Act of 1914 differ from the Sherman Antitrust Act of 1890?

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Question 3

Briefly describe the practice of predatory pricing.

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Question 4

What are the three examples of controversial business practices that antitrust laws often prohibit?

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Question 5

Before the , agreements between oligopolists were unenforceable contracts; afterwards, such agreements were criminal conspiracies.

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Question 6

Which potentially anti-competitive business practice is often justified on the grounds that it corrects for the free rider problem?

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Question 7

Scenario 17-6
Assume that a local telecommunications company sells high speed internet access and cable television. The company's only two customers are Taylor and Tim. Taylor is willing to pay $50 per month for high speed internet access and $50 per month for cable television. Tim is willing to pay only $20 per month for high speed internet access, but is willing to pay $70 per month for cable television. Assume that the telecommunications company can provide each of these products at zero marginal cost.
-Refer to Scenario 17-6. If the telecommunications provider is able to use tying to price high speed internet access and cable television, what is the profit-maximizing price to charge for the "tied" good?

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Assume that a local telecommunications company...

Question 8

Scenario 17-6
Assume that a local telecommunications company sells high speed internet access and cable television. The company's only two customers are Taylor and Tim. Taylor is willing to pay $50 per month for high speed internet access and $50 per month for cable television. Tim is willing to pay only $20 per month for high speed internet access, but is willing to pay $70 per month for cable television. Assume that the telecommunications company can provide each of these products at zero marginal cost.
-Refer to Scenario 17-6. How much additional profit can the telecommunications company earn by switching to the use of a tying strategy to price high speed internet access and cable television rather than pricing these goods separately?

Accepted Answer

The answer of Scenario 17-6
Assume that a local telecommunications company...

Question 9

The Clayton Act of 1914 allowed a person who successfully sued a company for damages caused by an illegal arrangement to restrain trade to recover damages.

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Question 10

Scenario 17-6
Assume that a local telecommunications company sells high speed internet access and cable television. The company's only two customers are Taylor and Tim. Taylor is willing to pay $50 per month for high speed internet access and $50 per month for cable television. Tim is willing to pay only $20 per month for high speed internet access, but is willing to pay $70 per month for cable television. Assume that the telecommunications company can provide each of these products at zero marginal cost.
-Refer to Scenario 17-6. If the telecommunications company is unable to use tying, what is the profit-maximizing price to charge for cable television?

Accepted Answer

The answer of Scenario 17-6
Assume that a local telecommunications company...

Question 11

Scenario 17-6
Assume that a local telecommunications company sells high speed internet access and cable television. The company's only two customers are Taylor and Tim. Taylor is willing to pay $50 per month for high speed internet access and $50 per month for cable television. Tim is willing to pay only $20 per month for high speed internet access, but is willing to pay $70 per month for cable television. Assume that the telecommunications company can provide each of these products at zero marginal cost.
-Refer to Scenario 17-6. If the telecommunications company is unable to use tying, what is the profit-maximizing price to charge for high speed internet access?

Accepted Answer

The answer of Scenario 17-6
Assume that a local telecommunications company...

Question 12

Briefly describe the business practice of tying.

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Question 13

Which of the controversial business practices, resale price maintenance, predatory pricing, or tying, was a part of a long-running antitrust lawsuit against Microsoft and why?

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Question 14

Briefly describe the practice of resale price maintenance.

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Question 15

Government regulators might suspect a firm of engaging in predatory pricing if it charges prices that seem to be too
__________.

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Question 16

Briefly describe the two arguments that economists make to defend the practice of resale price maintenance.

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Quiz 17: Oligopoly

Antitrust laws tend to target restraint of trade as characterized by .

How did the Clayton Act of 1914 differ from the Sherman Antitrust Act of 1890?

Briefly describe the practice of predatory pricing.

What are the three examples of controversial business practices that antitrust laws often prohibit?

Before the , agreements between oligopolists were unenforceable contracts; afterwards, such agreements were criminal conspiracies.

Which potentially anti-competitive business practice is often justified on the grounds that it corrects for the free rider problem?

The Clayton Act of 1914 allowed a person who successfully sued a company for damages caused by an illegal arrangement to restrain trade to recover damages.

Briefly describe the business practice of tying.

Which of the controversial business practices, resale price maintenance, predatory pricing, or tying, was a part of a long-running antitrust lawsuit against Microsoft and why?

Briefly describe the practice of resale price maintenance.

Government regulators might suspect a firm of engaging in predatory pricing if it charges prices that seem to be too __________.

Briefly describe the two arguments that economists make to defend the practice of resale price maintenance.