Question 1

Which of the following are exempted from antitrust violations under the Clayton Act?

Accepted Answer

The Clayton Act exempts from antitrust violations agricultural cooperatives.

Question 2

Minisculea,a small nation that exists on a Pacific Ocean island,is a major producer and seller of a substance known as XYZ.Minisculea is also the leader of a cartel of other XYZ producers.The cartel has raised XYZ prices,a fact of significant concern to the United States,given the many strategic uses to which XYZ can be put.U.S.officials have engaged in ongoing discussions with Minisculea about this subject.If Minisculea and the other cartel members are sued in a U.S.court for allegedly violating the U.S.antitrust acts by fixing the price at which they sold XYZ to U.S.customers,their best defense would be:

Accepted Answer

Since Minisculea is a foreign nation,its act of raising prices of XYZ as the leader of XYZ producer's cartel can be construed as a foreign government's sovereign act.The ongoing discussions of U.S.officials with Minisculea might indicate that this is a politically sensitive dispute.As such,the best defense of Minisculea and other cartel members would be the act of state doctrine if they are sued in a U.S.court for violation of the U.S.antitrust acts.

Question 3

Bunyan Corp.has patented a revolutionary chainsaw.In order to maximize the revenues from its patent and recover its research and development expenses,Bunyan requires other manufacturers that make the chainsaw under license from Bunyan to adhere to a minimum price schedule.Bunyan also requires its retail dealers to adhere to a minimum resale price schedule.The Justice Department has challenged Bunyan's marketing practices as unlawful.Is the challenge valid? Explain your reasoning.

Accepted Answer

The answer of Bunyan Corp.has patented a revolutionary chainsaw.In order...

Question 4

Section 2(b)of the Robinson-Patman Act allows a seller to price discriminate in certain geographic areas if the competition has a lower price.What can the seller lower the price to according to section 2(b)?

Accepted Answer

Section 2(b)of the Robinson-Patman Act allows a seller to reduce their price to the same price as the competitor.

Question 5

_____ of the Robinson-Patman Act makes it illegal for a buyer knowingly to induce or receive a discriminatory price in violation of Section 2(a)of the Robinson-Patman Act.

Accepted Answer

Section 2(f)of the Robinson-Patman Act makes it illegal for a buyer knowingly to induce or receive a discriminatory price in violation of Section 2(a)of the Robinson-Patman Act.

Question 6

Bigcorp,Inc. ,a huge conglomerate with interests in various industries,is acquiring Odorific Co. ,the nation's leading manufacturer of men's socks.None of Bigcorp's current "family" of companies purchases socks,nor do any of Bigcorp's suppliers.Bigcorp purchased Odorific after a study conducted by Bigcorp concluded that startup costs in the sock industry made a de novo entry impractical,and that none of the existing men's sock manufacturers other than Odorific could be acquired for a reasonable price.Odorific's competitors were stunned by the acquisition.They wish to challenge the acquisition.Which theory of attack best suits this case? Explain your reasoning.

Accepted Answer

The answer of Bigcorp,Inc. ,a huge conglomerate with interests in...

Question 7

Acme Co. ,a widget manufacturer,is acquiring Basic,Inc. ,another widget manufacturer.In view of the nature of the widget industry,a manufacturer's sales territories tend to correspond closely to the states in which it has manufacturing plants.Both Acme and Basic have plants in North Carolina,South Carolina,Tennessee,and Kentucky.In addition,Acme has plants in Illinois and Indiana,and Basic has a plant in Ohio.The post-merger market share of the two firms is likely to be 5 percent in the combined North Carolina,South Carolina,Tennessee,Kentucky,Illinois,Indiana,and Ohio markets,10 percent in the combined North Carolina,South Carolina,Tennessee,and Kentucky markets,and 32 percent in the combined North Carolina-South Carolina market,where Acme and Basic have been historically strong competitors.Which of the above markets is likely to be treated as the relevant geographic market for purposes of determining the legality of the acquisition? Why that market?

Accepted Answer

The answer of Acme Co. ,a widget manufacturer,is acquiring Basic,Inc....

Question 8

_____ of the Robinson-Patman Act prevents large buyers,either directly or through subsidiary brokerage agents,from receiving phony commissions or brokerage payments from their suppliers.

Accepted Answer

Section 2(c)of the Robinson-Patman Act prevents large buyers,either directly or through subsidiary brokerage agents,from receiving phony commissions or brokerage payments from their suppliers.

Question 9

Okeydokey,Inc.sells its canned beets to its wholly owned subsidiary,Buylow Co. ,which then sells the beets in the nationwide chain of Buylow grocery stores.In addition,Okeydokey sells canned beets to various other grocery store chains.The beets sold by Okeydokey to Buylow are packaged by Okeydokey under the Buylow label.The beets sold by Okeydokey to the other grocery store chains are packaged under the Okeydokey label.Despite the different names,however,the beets sold by Okeydokey under the two labels are the same in quality.The price at which Okeydokey sells the beets to Buylow is significantly lower than the price at which it sells the beets to the other chains.One of the other chains has brought a Robinson-Patman Act lawsuit against Okeydokey on the theory that Okeydokey engaged in price discrimination.Has Okeydokey violated the Robinson-Patman Act? Explain your reasoning.

Accepted Answer

The answer of Okeydokey,Inc.sells its canned beets to its wholly...

Question 10

Soundco,Inc. ,a leading manufacturer of stereo equipment,sells equipment to both wholesalers and retailers.Soundco regularly charges wholesalers less than it charges retailers for the same equipment.Contending that this pricing practice violated the Robinson-Patman Act,various retailers have sued Soundco.What should Soundco argue in an effort to avoid liability?

Accepted Answer

The answer of Soundco,Inc. ,a leading manufacturer of stereo equipment,sells...

Quiz 50: The Clayton Act, the Robinson-Patman Act, and Antitrust Exemptions and Immunities

Which of the following are exempted from antitrust violations under the Clayton Act?

Section 2(b) of the Robinson-Patman Act allows a seller to price discriminate in certain geographic areas if the competition has a lower price.What can the seller lower the price to according to section 2(b) ?

_____ of the Robinson-Patman Act makes it illegal for a buyer knowingly to induce or receive a discriminatory price in violation of Section 2(a) of the Robinson-Patman Act.

_____ of the Robinson-Patman Act prevents large buyers,either directly or through subsidiary brokerage agents,from receiving phony commissions or brokerage payments from their suppliers.