Question 1

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 refers to the principle that when a dispute raises issues of fact and policy that are within the expertise of a regulatory agency, the court should defer to the agency's jurisdiction and allow it to resolve the issue first before the courts intervene. This approach is intended to promote consistency and efficiency in regulatory decision-making and avoid conflicting outcomes from different branches of government.

Question 2

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 a manufacturing facility. In this case, Cake-a-licious purchasing a wheat farm is an example of backward vertical integration, as it is acquiring a supplier of its key input, flour.

Question 3

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 a(n)_____.

Accepted Answer

The adverse effect experienced by B&T Inc. is an example of a primary-line injury. This occurs when a seller cuts prices to one buyer, causing harm to another buyer who sells the same product at a higher price. In this case, T&Y Inc. is cutting prices for Humdingers, which is B&T's exclusive buyer, causing harm to B&T's sales. This is a violation of the Robinson-Patman Act.

Question 4

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 refers to the prohibition of monopolization and attempts to monopolize. The other choices relate to different sections of the law or other labor-related issues.

Question 5

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

Cross-elasticity of demand measures the responsiveness of demand for one product (butter) to a change in the price of another product (margarine). If the cross-elasticity of demand between margarine and butter is high, it means that an increase in the price of butter will lead to a higher demand for margarine and vice versa. By determining the cross-elasticity of demand, the Supreme Court can understand how much of a substitute margarine is for butter, which will help them in making a decision. The other options (A, B, D, and E) are not relevant to determining the degree with which margarine can act as a substitute product for butter.

Question 6

Differentiate the Clayton Act from the Sherman Act.

Accepted Answer

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

Question 7

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

Accepted Answer

Congress explicitly exempted labor unions from the antitrust laws in the Clayton Act. This was done to protect the rights of workers to organize and negotiate collective bargaining agreements.

Question 8

Grain Train Inc. sells wheat to both Whack 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 a(n) _____ at the buyer's level.

Accepted Answer

This situation describes a secondary-line injury, which occurs when a supplier gives preferential treatment to a buyer, potentially harming the competition between the buyer and other companies in the same market. In this case, Grain Train Inc. is helping Pack Inc. cut its costs, which could give Pack Inc. an unfair advantage over Snack Inc., which is also a buyer of Grain Train Inc.'s wheat.

Question 9

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 doctrine described in the question is the indirect purchaser doctrine, which holds that a seller who intermediates between retail customers and a wholesaler can be held to have violated the Clayton Act's restrictions on monopolies and anticompetitive practices. The other answer choices do not apply to this scenario. The parens patriae doctrine pertains to the power of the state to sue on behalf of its citizens, while Parker immunity refers to immunity from antitrust lawsuits granted to certain types of state action. Res judicata is a principle of law that bars relitigation of the same claim or issue. The ultra vires doctrine concerns the authority of a corporation to act beyond the scope of its charter or legal powers.

Question 10

When is the failing company doctrine under Clayton Act applicable?

Accepted Answer

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

Question 11

The demand for Crunchy chips in the junk food market segment was about to reach saturation point. A 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 a(n) _____ with the retailers.

Accepted Answer

Great Foods Inc. entered into a tying contract with the retailers, where they tied the sale of one product (rose flavored milk) to the sale of another (Crunchy chips). This is a common strategy used to increase the sales of a less popular product by leveraging the demand for a more popular product.

Question 12

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 is a complex and controversial law that many businesses find difficult to comply with. The law prohibits price discrimination and requires sellers to charge the same price to all buyers unless there is a legitimate reason for the difference. The law was named after Congressman Wright Patman and Senator Joseph Robinson, who sponsored the bill. Mary Mallon, known as Typhoid Mary, was a cook who unwittingly spread typhoid fever to numerous people in the early 20th century. The comparison to Mary Mallon suggests that the Robinson-Patman Act is seen as a carrier of economic harm.

Quiz 48: Antitrust Law