Question 1

The ________ is an act that requires certain firms to notify the Federal Trade Commission and the Justice Department in advance of a proposed merger and comply with a thirty-day waiting period before the merger is approved.

Accepted Answer

The Hart-Scott-Rodino Antitrust Improvement Act requires companies to submit a pre-merger notification to the Federal Trade Commission and the Justice Department and observe a 30-day waiting period before a proposed merger is approved. The Celler-Kefauver Act amended the Clayton Antitrust Act to prohibit stock acquisitions that resulted in anti-competitive practices, the Robinson-Patman Act prohibits price discrimination and the Sherman Act prohibits monopolies and anti-competitive practices.

Question 2

It is necessary to prove actual injury in order for a plaintiff to recover in a price discrimination lawsuit.

Accepted Answer

According to the Robinson-Patman Act, in order for a plaintiff to recover in a price discrimination lawsuit, they must prove actual injury resulting from the price discrimination. Simply showing that the defendant engaged in price discrimination is not enough.

Question 3

Vertical mergers create an increase in market share because the merging firms serve similar markets.

Accepted Answer

Vertical mergers involve companies at different stages of production or distribution in the same industry, not companies serving similar markets, which is characteristic of horizontal mergers.

Question 4

Which of the following is considered a primary defense against Section 7 of the Clayton Act?

Accepted Answer

The failing company doctrine is considered a primary defense against Section 7 of the Clayton Act because it allows a merger or acquisition that might otherwise reduce competition if one of the companies is on the brink of failure and has no other viable alternatives.

Question 5

Mergers between firms in unrelated businesses are known as ________ mergers.

Accepted Answer

The answer of Mergers between firms in unrelated businesses are...

Question 6

What is a premerger notification? Explain the process outlined by the Hart-Scott-Rodino Antitrust Improvement Act to execute a merger.

Accepted Answer

The answer of What is a premerger notification? Explain the...

Question 7

The merger of two grocery store chains that serve the same geographical market is an example of a horizontal merger.

Accepted Answer

A horizontal merger involves the merging of two companies in the same industry and market, with the goal of achieving economies of scale or eliminating competition. In this case, the two grocery store chains are within the same industry and serve the same geographical market, therefore it is an example of a horizontal merger.

Question 8

Section 1 of the Sherman Act allows for intangible properties to be sold in tying arrangements.

Accepted Answer

Section 1 of the Sherman Act prohibits tying arrangements, which require a consumer to purchase a less desired product in order to obtain a more desired one. It does not allow for the sale of intangible properties in such arrangements.

Question 9

According to the failing company doctrine,two or more smaller companies are allowed to merge to compete with a larger company even if they are highly profitable as smaller companies.

Accepted Answer

The failing company doctrine only allows for two or more failing companies to merge in order to create a stronger, competitive entity. Profitable smaller companies are not eligible for this exception to antitrust laws.

Question 10

________ are vertical trade restraints that involve the seller's refusal to sell a product,the tying item,to a customer unless the customer purchases a second product.

Accepted Answer

The answer of ________ are vertical trade restraints that involve...

Question 11

The ________ Act,enacted in 1950,widened the scope of Section 7 of the Clayton Act to include asset acquisitions.

Accepted Answer

The answer of The ________ Act,enacted in 1950,widened the scope...

Question 12

What are the three statutory defenses under the Robinson-Patman Act for price discrimination?

Accepted Answer

The answer of What are the three statutory defenses under...

Question 13

The ________ Act is a federal statute,enacted in 1930,that prohibits price discrimination.

Accepted Answer

The answer of The ________ Act is a federal statute,enacted...

Question 14

________ are mergers between firms in totally unrelated businesses.

Accepted Answer

Conglomerate mergers are between firms in totally unrelated businesses, such as a food company merging with a construction company. Market extension mergers involve firms in similar markets but different geographical areas, horizontal mergers involve firms in the same industry, and forward vertical mergers involve a company merging with a supplier or distributor.

Question 15

________ is a restraint of trade in which a seller refuses to sell one product to a customer unless the customer agrees to purchase a second product from the seller.

Accepted Answer

A tying arrangement is when a seller agrees to sell one product only if the customer agrees to purchase a second product as well. This is a restraint of trade as it limits the customer's choices and could result in higher costs.

Question 16

The unfair advantage theory is intended to prevent wealthy companies from overwhelming the competition in a given market.

Accepted Answer

The unfair advantage theory is a regulatory principle that aims to prevent wealthy companies from using their financial resources to gain an unfair advantage over smaller competitors in a market. This is typically achieved through measures such as stricter antitrust regulations, stronger consumer protection laws, and more robust enforcement of existing regulations. The goal of this theory is to promote a level playing field in which all companies can compete on the basis of their products, services, and innovation, rather than their financial resources.

Question 17

The relevant product or service market generally includes substitute products or services that are reasonably interchangeable with the defendant's products or services.

Accepted Answer

This statement is true. The relevant product or service market includes substitute products or services that can be reasonably interchanged with the defendant's products or services, and this is important in determining the level of competition within that market.

Question 18

A merger between two regional fruit-sellers that do not sell fruit in the same geographical area is an example of a ________.

Accepted Answer

A market extension merger occurs when two companies that sell the same products but in different markets combine. This type of merger allows the companies to extend their market reach.

Question 19

Which of the following businesses or activities enjoy a statutory exemption from antitrust laws?

Accepted Answer

Agricultural cooperatives enjoy a statutory exemption from antitrust laws under the Capper-Volstead Act. Airlines, professional baseball, and other professional sports and games do not have this exemption.

Question 20

The ________ is a defense in a Section 2(a)action which provides that a seller's price discrimination is not unlawful if the price differential is due to "differences in the cost of manufacture,sale,or delivery" of the product.

Accepted Answer

The cost justification defense provides that a seller's price discrimination is not illegal if the price difference is due to differences in the cost of manufacture, sale, or delivery of the product. The natural monopoly defense applies when the seller has a monopoly due to natural circumstances like owning a scarce resource. The meeting the competition defense applies when a seller lowers their prices to meet their competitors. The changing conditions defense applies when the seller changes their prices due to changes in market conditions.

Quiz 22: Antitrust Law and Unfair Trade Practices