Question 1

A merger between two or more companies producing the same or similar products is a ______ merger.

Accepted Answer

A merger between two or more companies producing the same or similar products is a horizontal merger.

Question 2

Which of the following is an inquiry into the competitive effects of a company's behavior to determine whether the benefits of the behavior outweigh the harm of the anticompetitive behavior?

Accepted Answer

The rule-of-reason analysis is an inquiry into the competitive effects of a company's behavior to determine whether the benefits of the behavior outweigh the harm of the anticompetitive behavior.

Question 3

By what U.S.Constitutional authority did Congress pass the Sherman Act?

Accepted Answer

Congress passed the Sherman Act through its authority to regulate interstate commerce.

Question 4

When one company at one level of the manufacturing-distribution system acquires a company at another level of the system,the merger is called a ______ merger.

Accepted Answer

When one company at one level of the manufacturing-distribution system acquires a company at another level of the system, this merger is called a vertical merger.

Question 5

Which two markets does a court consider in identifying the relevant market for monopolization purposes?

Accepted Answer

The way the court defines the relevant market is immensely important in determining whether a company is monopolizing. When the court identifies the relevant market, it considers two markets: product and geographic markets.

Question 6

A seller engages in _______ when it sells the same goods to competing buyers for different prices.

Accepted Answer

A seller engages in price discrimination when it sells the same goods to competing buyers for different prices.

Question 7

Which of the following was the result in Continental T.V.Inc.,v.GTE Sylvania Inc.,the U.S.Supreme Court case in which Continental argued that Sylvania violated the Sherman Act by restricting the location of retailers that could sell its product?

Accepted Answer

The court ruled that in a vertical restriction case, "we do not foreclose the possibility that particular applications of vertical restrictions might justify per se prohibition under Northern Pac. R. Co. But we do make clear that departure from the rule-of-reason standard must be based upon demonstrable economic effect rather than…upon formalistic line drawing."

Question 8

Which analysis,if any,is applied to territorial and customer restrictions imposed by a manufacturer on a retailer?

Accepted Answer

Historically, the courts assessed territorial restrictions and customer restrictions as per se violations; however, the Supreme Court changed the standard from per se to rule-of-reason analysis.

Question 9

Which of the following is not an example of a horizontal restraint of trade?

Accepted Answer

Types of agreements classified as horizontal restraints of trade are price fixing, horizontal division of markets, group boycotts, trade associations, and joint ventures.

Question 10

Which of the following was left the responsibility of identifying which specific behaviors were prohibited under the Sherman Act?

Accepted Answer

Congress did not specify which specific behaviors were prohibited under the Sherman Act. Instead, it left this task to the courts.

Question 11

Which of the following prohibits price discrimination by sellers?

Accepted Answer

Section 2 of the Clayton Act (as amended by the Robinson-Patman Act in 1936) prohibits price discrimination by sellers.

Question 12

Under the Clayton Act,the Department of Justice is most likely to challenge which of the following types of mergers?

Accepted Answer

Of the three types of mergers, the Department of Justice and the courts are most likely to challenge horizontal mergers.

Question 13

Which of the following practices does the Clayton Act identify that are not covered under the Sherman Act?

Accepted Answer

The Clayton Act identifies the following four business practices not covered under the Sherman Act:
1. Price discrimination (Section 2 of the Clayton Act).
2. Exclusionary practices (Section 3).
3. Mergers (Section 7).4. Interlocking directorates (Section 8).

Question 14

Which of the following is the type of violation of Section 1 of the Sherman Act that is involved when it is determined that business practices always hurt consumers?

Accepted Answer

Certain business practices always hurt consumers. These practices are called per se violations.

Question 15

When a company prices one product below normal cost until competitors are eliminated and then sharply increases the price,the company is practicing ______ pricing.

Accepted Answer

When a company prices one product below normal cost until competitors are eliminated and then sharply increases the price, the company is practicing predatory pricing.

Question 16

Section _____ of the Clayton Act prohibits anticompetitive mergers or acquisitions.

Accepted Answer

Section 7 of the Clayton Act prohibits anticompetitive mergers or acquisitions.

Question 17

When two parties at different levels in the manufacturing and distribution process make an agreement that restrains trade,they have made a ______ restraint against trade.

Accepted Answer

When two parties at different levels in the manufacturing and distribution process make an agreement that restrains trade, they have made a vertical restraint against trade.

Question 18

Which of the following is true if a seller engages in price discrimination in order to compete in good faith with another seller's low price?

Accepted Answer

If a seller engages in price discrimination to compete in good faith with another seller's low price, the seller is not guilty of violating the Clayton Act. This defense to price discrimination is called the meeting-the-competition defense.

Question 19

When a company merges with another company that is not a competitor or a buyer or seller to the company,that merger is called a ______ merger.

Accepted Answer

When a company merges with another company that is not a competitor or a buyer or seller to the company, this merger is called a conglomerate merger.

Question 20

Which of the following standards allows a defendant to offer justification for a per se violation of Section 1 of the Sherman Act,in which case the court will engage in a rule-of-reason analysis?

Accepted Answer

The "quick-look" standard, permits the defendant to offer justification for his per se violation. If the defendant can offer justification, the court then engages in rule-of-reason analysis.

Quiz 47: Antitrust Law