Question 1

Differentiate the Clayton Act from the Sherman Act.

Accepted Answer

The answer of Differentiate the Clayton Act from the Sherman...

Question 2

B&T Inc.sells exclusively to Humdingers in North Dakota,and T&Y Inc.sells both to Humdingers and several other wholesalers.If T&Y Inc.cuts its prices to Humdingers while charging higher prices to the other wholesalers,B&T Inc.experiences an adverse effect.This adverse effect is an example of an)_____.

Accepted Answer

This situation describes a primary-line injury, which occurs when a supplier's sales to a key customer are adversely affected by the supplier's sales to other customers at lower prices. In this case, T&Y Inc. is cutting prices to Humdingers while charging higher prices to other wholesalers, which puts pressure on Humdingers to demand lower prices from B&T Inc. to remain competitive.

Question 3

The _____ dictates that the question of regulatory propriety must first be submitted to the regulating agency before the courts will rule on an antitrust question.

Accepted Answer

The primary jurisdiction doctrine dictates that the question of regulatory propriety must first be submitted to the regulating agency before the courts will rule on an antitrust question. This principle is based on the idea that regulatory agencies, with their expertise and specialized knowledge, are better equipped to address issues related to their fields than generalist courts.

Question 4

Which of the following should be the Supreme Court's preferred course of action,if it wants to determine the degree with which margarine can act as a substitute product for butter due to the latter's increase in prices?

Accepted Answer

In order to determine the degree with which margarine can act as a substitute product for butter, the Supreme Court should look at the cross-elasticity of demand between margarine and butter. Cross-elasticity of demand measures the responsiveness of demand for a product to a change in the price of another product. If margarine is a close substitute for butter, then an increase in the price of butter should lead to an increase in the demand for margarine. Therefore, cross-elasticity of demand between margarine and butter is the best way to determine the degree to which margarine can act as a substitute product for butter due to the latter's increase in prices.

Question 5

When is the failing company doctrine under Clayton Act applicable?

Accepted Answer

The answer of When is the failing company doctrine under...

Question 6

Under the _____ a seller who deals with two or more retail customers but passes their orders on to a single wholesaler and sells the total quantity to the wholesaler in one transaction,can be held to have violated Section 2 of the Clayton Act.

Accepted Answer

The scenario described in the question is an example of the indirect purchaser doctrine, which allows retail customers to bring antitrust claims against a seller who passes their orders on to a single wholesaler. This violates Section 2 of the Clayton Act, which prohibits monopolies and attempts to monopolize. The other answer choices are not relevant to the scenario described.

Question 7

Cake-a-licious,a large bakery business,purchased a wheat farm in order to reduce the risk associated with its dependency on flour.This is an example of _____.

Accepted Answer

Backward vertical integration involves a company acquiring a supplier or raw materials producer in order to reduce the risk associated with dependency on external suppliers. In this case, Cake-a-licious acquired a wheat farm to secure its supply of flour and therefore reduce risk, which is a classic example of backward vertical integration.

Question 8

Section 2 of the Sherman Act states that:

Accepted Answer

Section 2 of the Sherman Act states that "Every person who shall monopolize, or attempt to monopolize shall be deemed guilty of a felony." This means that it is illegal for any person or company to intentionally monopolize a particular industry or attempt to do so.

Question 9

Which of the following is known as the "Typhoid Mary of Antitrust?"

Accepted Answer

The Robinson-Patman Act is known as the "Typhoid Mary of Antitrust" because it forbids price discrimination, which can lead to the spread of monopolies. This nickname references the infamous case of Mary Mallon, who unwittingly spread typhoid fever to multiple households as a carrier of the disease, similarly to how price discrimination can spread monopolistic power.

Question 10

Grain Train Inc.sells wheat to both Pack Inc.and Snack Inc.,both manufacturers of wheat breads in New York.However,Grain Train Inc.helps Pack Inc.cut its costs by supplying wheat at low prices which in turn distorts the competition between Pack Inc.and Snack Inc.This is an example of an)_____ at the buyer's level.

Accepted Answer

This scenario is an example of a secondary-line injury, where a supplier (Grain Train Inc.) favors one buyer (Pack Inc.) over another (Snack Inc.) by offering lower prices, thereby affecting the competitive balance between the two buyers.

Question 11

The demand for Crunchy chips in the junk food market segment was about to reach saturation point.Majority of the retailers wanted to stock Crunchy chips.Great Foods Inc.,the manufacturer of Crunchy chips,also manufactured rose flavored milk that was not doing well in the market.In order to maximize the sales of the rose flavored milk,Great Foods Inc.entered into an agreement with a group retailers stating that for every two packets of Crunchy chips,they would have to stock one bottle of the rose flavored milk.It can be said that,Great Foods Inc.entered into an)_____ with the retailers.

Accepted Answer

The agreement between Great Foods Inc. and the retailers, where the retailers were required to stock one bottle of rose flavored milk for every two packets of Crunchy chips, is an example of a tying contract. A tying contract is a agreement where a seller offers one product or service to the buyer but only on the condition that the buyer purchases a second product or service from the seller. In this case, the seller is offering the popular Crunchy chips on the condition that the retailers must also stock their less popular rose flavored milk.

Question 12

In the Clayton Act,Congress explicitly exempted _____.from the antitrust laws.

Accepted Answer

The Clayton Act explicitly exempted labor unions from the antitrust laws in order to protect the rights of workers to collectively bargain and advocate for better wages and working conditions.

Quiz 26: Antitrust Law