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Govt. Regulations
| Question | Answer |
|---|---|
| The government can regulate not just business, but also business competition and prices. | True |
| The Federal Trade Commission administers the law prohibiting unfair methods of competition. | True |
| The United States Supreme Court generally has held that vertical merger agreements should not automatically be condemned as an unlawful restraint of interstate commerce merely because they create the potential to monopolize it. | True |
| The Sherman Act applies only to buying and selling activities, not manufacturing and production activities. | False |
| Under the Robinson-Patman Act, wholesalers may give new distributors free advertising and other services to help them compete with other distributors who have been doing business for a number of years and have become firmly established. | False |
| Under the Sherman Act competitors are permitted to agree not to deal with certain buyers. | False |
| The Clayton Act prohibits price discrimination between different buyers of like commodities when the effect may be to substantially lessen competition. | True |
| The attorney general of a state may bring a class action suit to recover damages for those injured by an antitrust violation which raised prices. | True |
| Requiring buyers to purchase one product in order to get another is acceptable practice and not a violation of the Sherman Act. | False |
| Price discrimination is not permitted even when it can be justified on the basis of a difference in grade, quality, or quantity. | False |
| Nobel economist Milton Friedman believes that government regulation of business interferes with the free enterprise system. | True |
| Market power under the Sherman Act is defined by both geographic and product markets. | True |
| Having a large percentage of the market is not necessarily a monopoly. | True |
| Governments may regulate prices but not credit terms. | False |
| Each of the states and the federal government have statutes and regulations that prohibit unfair methods of competition. | True |
| Criminal penalties are possible under the Sherman Act. | True |
| Boycotts are always illegal, even when done with good intentions. | True |
| An agreement to charge an agreed-upon price or to set maximum or minimum prices between or among competitors is called price fixing but it is not per se a violation of the Sherman Act. | False |
| An agreement between real estate brokers to never charge a commission less than 6% is not an example of price fixing. | False |
| A state may prohibit a seller from selling below cost if the purpose is to harm competitors. | True |
| A price reduction to one customer is lawful when it is made because of the deteriorated condition of the goods sold to that customer. | True |
| A person who is harmed by a conspiracy that violates the Sherman Antitrust Act may sue the wrongdoers for treble damages, which is four times the actual damages. | False |
| A manufacturer having a restriction on territories in the form of a sole outlet is a per se violation. | False |
| A divestiture order is a decree ordering a defendant to dispose of excessive ownership or control of interests in competing enterprises. | True |
| A "suggested retail price" is not a violation of the antitrust laws. | True |
| Who can regulate competition and prices? | Federal and State government |
| What is the per se rule? | makes certain practices conclusively unreasonable and therefore, illegal. |
| What did the Clayton Act prevent companies from doing? | Acquiring stock from another company |
| What was the purpose of the Robinson-Patman Act? | To protect smaller businesses by limiting the large company's ability to command discriminatory discounts through its purchasing power. |
| What does the Federal Trade Commission Act authorize the Federal Trade Commission to do? | Enforce the other three antitrust laws. |
| What are horizontal restraints? | restraints among competitors |
| What are vertical restraints? | restraints through the supply chain |
| What is a monoploy? | A situation in which a single company or group owns all or nearly all of the market for a given type of product/service |
| What is market power? | The ability to control price and exclude competitors |
| Boycotts are violations of what act? | The Sherman Antitrust Act |
| If you are planning to merge companies, who must be notified? How? | Written notice to the Federal Trade Commission and the head of the Antitrust Division of the Department of Justice |
| Which acts prohibit price discrimination? | Clayton Act and Robinson-Patman Act |
| What is a divestiture order? | a court order to dispose of interests that could lead to a monopoly |
| What is the name for the anticompetitive practice of requiring buyers to purchase one product in order to get another? | Tying |
| What are treble damages? | three times the damages actually sustained |
Created by:
Jlm2375
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