269. Monopsony power is:
a. market power on the buy side of the market
b. market power on the sell side of the market
c. colloquially called a “seller‘s monopoly power”
d. colloquially called a “distributor‘s monopoly power”
e. the same thing as monopoly power
270. Monopsony power is:
a. the same thing as monopoly power
b. market power on the sell side of the market
c. colloquially called a “seller‘s monopoly power”
d. colloquially called a “distributor‘s monopoly power”
e. none of the other choices are correct
271. The cost justification defense used by firms charged with violating Robinson-Patman:
a. is often successfully applied
b. must meet FTC vertical guideline standards
c. is difficult to use because costs usually cannot be assigned to specific products sold to particular buyers
d. all of the other specific choices
e. none of the other choices
272. One of the main ways for a firm charged with violating the Robinson-Patman Act to defend itself is to show a(n)
for different prices charged in different markets or to different buyers.
a. cost justification
b. efficiency justification
c. humanitarian justification
d. false justification
e. price justification
273. Defenses for firms charged with Robinson-Patman Act violations include:
a. meeting competition
b. predatory pricing justification
c. foreign discounting
d. none of the other choices
e. all of the other specific choices
274. Defenses for firms charged with Robinson-Patman Act violations include:
a. cost justification
b. predatory pricing justification
c. foreign discounting
d. cost justification and predatory pricing justification
e. cost justification and predatory pricing justification and foreign discounting
275. The Dog Groomers of Arizona lobbies the Arizona legislature to impose strict licensing requirements on new
groomers. These severely limit entry into the occupation, but allow existing groomers to stay in operation regardless
of ability. The legislature passes the law. Under the antitrust laws this is likely to be:
a. an illegal boycott
b. an illegal exclusive dealing arrangement
c. an illegal price discrimination arrangement
d. an illegal territorial restriction
e. exempt from prosecution under the Parker doctrine
276. The wholesaler of Soap Opera Review is found guilty of monopolistic practices that caused the price of the
magazine to be $1 higher than it should have been. Under the Sherman Act, the plaintiff may sue for:
a. for treble damages plus court costs and attorney fees
b. for $1 worth of damages, trebled to $3
c. for a criminal felony only
d. for specific performance only
e. for nominal damages only
277. You own a hair salon in a college town. Because there is competition for customers, the salons have been in a price
war. You invite all salon owners to your home. They decide that the price war is hurting everyone and agree to
charge standard rates for hairstyling. This arrangement is:
a. legal because it was a voluntary arrangement
b. legal because the price of styling hair is too low to be subject to the antitrust laws
c. legal because it does not hurt competition
d. legal under the rule of reason because the alternative, fewer salons, would mean less competition
e. illegal
278. You own a hair salon in a college town. Because there is competition for customers, the salons have been in a price
war. You invite all salon owners to your home. They decide that the price war is hurting everyone and agree to
charge standard rates for hairstyling. This arrangement is:
a. legal because it was a voluntary arrangement
b. legal because the price of styling hair is too low to be subject to the antitrust laws
c. legal because it does not hurt competition
d. legal under the rule of reason because the alternative, fewer salons, would mean less competition
e. none of the other choices
279. The government would most likely try to stop a merger between:
a. McDonald‘s and R.C. Cola
b. Toyota and General Motors
c. U.S. Steel and American Airline
d. Nike Shoes and Pepsi Cola
e. all of the other choices would be equally likely to be prevented because they all involve major corporations
280. You have a book publishing company. You own a paper mill, a printing operation, and a bindery. Within your firm
you produce the paper for your books, print the manuscripts, bind the finished product, edit the authors’ work, and
sell the books. You refuse to deal with any companies that could supply you these services. What problem(s) do
you most likely have with the antitrust laws? You face:
a. treble damages claims under the Sherman Act for horizontally restraining trade
b. no antitrust problems because you are a single company
c. possible criminal penalties under the Clayton Act for conspiring to dominate a market
d. only minor problems because your operations are relatively small
e. none of the other choices
281. You have a book publishing company. You own a paper mill, a printing operation, and a bindery. Within your firm
you produce the paper for your books, print the manuscripts, bind the finished product, edit the authors’ work, and
sell the books. You refuse to deal with any companies that could supply you these services. What problem(s) do
you most likely have with the antitrust laws? You face:
a. treble damages claims under the Sherman Act for horizontally restraining trade
b. only minor problems because your operations are relatively small
c. possible criminal penalties under the Clayton Act for conspiring to dominate a market
d. violation of the Robinson–Patman Act
e. none of the other choices
282. A hospital requires that patients use the food services provided by one firm with which the hospital contracts. Pizza
Hut wants to sell its food to patients in the hospital too, but the hospital refuses. Pizza Hut sues the hospital because
of the tie-in between hospital stays and food service. The Supreme Court will probably hold the hospital‘s rule is:
a. a per se illegal tie-in sale
b. an illegal tie-in sale under a rule of reason analysis because of the loss of competition
c. legal because tie-in sales are per se legal
d. legal because under a rule of reason analysis the tie-in is not seen to injure competition
e. none of the other choices
283. A hospital requires that patients use the food services provided by one firm with which the hospital contracts. Pizza
Hut wants to sell its food to patients in the hospital too, but the hospital refuses. Pizza Hut sues the hospital because
of the tie-in between hospital stays and food service. The Supreme Court will probably hold the hospital‘s rule is:
a. a per se illegal tie-in sale
b. an illegal tie-in sale under a rule of reason analysis because of the loss of competition
c. legal because tie-in sales are per se legal
d. an illegal boycott under a rule of reason analysis
e. none of the other choices
284. Texaco sold gas to some gas stations for less than it sold gas to Hasbrouck, who sued. You would expect that the
Supreme Court held Texaco had:
a. not violated any antitrust law because it sold the product for less to large volume chains less, which met the
cost justification defense
b. not violated any antitrust law because it sold the product for less in order to meet competition that offered the
same price to the chains
c. violated the rule against resale price maintenance
d. boycotted Hasbrouck by making him pay a higher price
e. engaged in illegal price discrimination against Hasbrouck
285. Ayau Distributors, which has stores in Ohio and Michigan, sells bedroom furniture for very low prices, but requires
that buyers to also purchase a washing machine at a rather high price. This requirement probably is:
a. a tie–in sale that is illegal per se like all tie-in sales
b. a tie-in sale that is illegal under a rule of reason analysis because of the negative effect on competition
c. a tie-in sale that is legal under a rule of reason analysis because there is little market effect on the products
d. a tie-in sale that is legal per se like all tie–in sales since the duPont case
e. an illegal exclusive dealing contract
286. Ayau Distributors, which has stores in Ohio and Michigan, sells bedroom furniture for very low prices, but requires
that buyers to also purchase a washing machine at a rather high price. This requirement probably is:
a. a tie–in sale that is illegal per se like all tie-in sales
b. a tie-in sale that is illegal under a rule of reason analysis because of the negative effect on competition
c. a tie–in sale that is legal per se like all tie–in sales since the duPont case
d. an illegal exclusive dealing contract
e. none of the other choices
287. Retailers in a city discovered that some products they bought for retail sale were being sold by distributors directly
to the public, thereby reducing sales that could have gone to the retailers. The retailers got together and agreed not
to buy any goods from distributors who sold directly to the public. This agreement is:
a. an illegal boycott
b. a legal boycott protected by right to free speech
c. a legal boycott unless it has major economic consequences
d. a violation of the Robinson-Patman Act
e. none of the other choices
288. Retailers in a city discovered that some products they bought for retail sale were being sold by distributors directly
to the public, thereby reducing sales that could have gone to the retailers. The retailers got together and agreed not
to buy any goods from distributors who sold directly to the public. This agreement is:
a. a legal boycott because it helps competition
b. a legal boycott protected by right to free speech
c. a legal boycott unless it has major economic consequences
d. a violation of the Robinson-Patman Act
e. none of the other choices
289. Mayora is a retail clothing chain selling Pollo and other quality brand clothing. Mayora has very high prices, usually
30% over suggested retail price. Pollo tells Mayora it is fed up with this high pricing. Pollo tells Mayora to stop
selling its products above list price or it will cut off sales to Mayora. Is this a possible violation of the antitrust laws?
a. under State Oil v. Khan, this will probably not be a violation
b. no; such actions are specifically prohibited under the Robinson-Patman Act
c. yes; such actions are a conspiracy to fix price illegal under the Sherman Act
d. yes; such actions may well be held a vertical restraints of trade
e. yes; such actions violate the interlocking directorate section of the FTC Act
290. Mayora is a retail clothing chain selling Pollo and other quality brand clothing. Mayora has very high prices, usually
30% over suggested retail price. Pollo tells Mayora it is fed up with this high pricing. Pollo tells Mayora to stop
selling its products above list price or it will cut off sales to Mayora. Is this a possible violation of the antitrust laws?
a. no; such actions are specifically prohibited under the Robinson-Patman Act
b. yes; such actions violate the interlocking directorate section of the FTC Act
c. yes; such actions are a conspiracy to fix price illegal under the Sherman Act
d. yes; such actions may well be held a vertical restraints of trade
e. none of the other choices
291. Acme produces hamburger at a processing plant. Stores send trucks to pick up the meat. Prince, a large chain of
grocery stores, tells Acme it will buy its hamburger if Acme will charge it 5% less than what the grocery stores
pay. Acme sells the meat to Prince for less. What violation of the antitrust law may have occurred?
a. illegal resale price maintenance
b. illegal exclusive dealing
c. illegal price discrimination
d. illegal boycott
e. none of the other choices
292. Acme produces hamburger at a processing plant. Stores send trucks to pick up the meat. Prince, a large chain of
grocery stores, tells Acme it will buy its hamburger if Acme will charge it 5% less than what the grocery stores
pay. Acme sells the meat to Prince for less. What violation of the antitrust law may have occurred?
a. illegal resale price maintenance
b. illegal exclusive dealing
c. illegal vertical integration
d. illegal boycott
e. none of the other choices
293. Alpha, an expensive brand of watch that sell for $5,000 (suggested retail price), sells to fine jewelry stores for
$2,500. Irritated that Amer’s Jewelry is selling the watches to the public for $4,000, while competitors are selling for
$5,000, stops selling the watches to Amer‘s. Amer’s sues Alpha for antitrust violation. It is likely that Amer’s will:
a. win for price fixing violation of the Sherman Act
b. win for Robinson-Patman Act violation
c. win for Section 5 FTC Act violation
d. lose because it violates the Robinson-Patman Act
e. lose because Alpha has the right to decide who to sell to
294. Alpha, an expensive brand of watch that sell for $5,000 (suggested retail price), sells to fine jewelry stores for
$2,500. Irritated that Amer’s Jewelry is selling the watches to the public for $4,000, while competitors are selling for
$5,000, stops selling the watches to Amer‘s. Amer’s sues Alpha for antitrust violation. It is likely that Amer’s will:
a. win for price fixing violation of the Sherman Act
b. win for Robinson-Patman Act violation
c. win for Section 5 FTC Act violation
d. lose because it violates the Robinson-Patman Act
e. none of the other choices