Game designers Troy and Jeff design a new computer game system, and it is manufactured and sold by their company, GameTech. The game system they devise uses new technology that they have created and far exceeds the capabilities of any current gaming systems. It is also so simple to manufacture that they can do so at a very minimal cost. When it hits the market it is so much better and cheaper than the "competition" that they all end up either in bankruptcy or simply withdrawing their products from the market. GameTech's system is now the only gaming system on the market.
A) GameTech is guilty of engaging in predatory conduct.
B) GameTech has a monopoly which violates the Sherman Act.
C) GameTech has a monopoly which does not violate the Sherman Act but violates the Clayton Act.
D) GameTech has a monopoly which does not violate either the Sherman or Clayton Act
E) GameTech is guilty of variable pricing.

Question

Quizplus · Accepted Answer

Some monopolies are lawful. If monopoly power is "thrust upon" a firm or if it exists because of a patent or franchise, there is no violation of Section 2 if the firm does not engage in conduct that has the effect or purpose of protecting, enforcing, or extending the monopoly power.

Game Designers Troy and Jeff Design a New Computer Game