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Exam 23: Antitrust Law and Promoting Competition

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Question 41

Multiple Choice

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To drive its competitors out of a certain geographic segment of its market, Fryin' Potatoes, Inc., sets the prices of its products below cost for the buyers in that area.This is

A) a refusal to deal.
B) business acumen.
C) predatory bidding.
D) price discrimination.

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Question 42

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Monopoly power is a minor amount of market power.

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Question 43

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Organic Cheeses, Inc., Fine & Fresh Foods Company, and Healthy Whole Foods, Inc.organize together to exchange information and share advertising.This is an example of a

Spa Selectiva Company makes and sells beauty salon supplies.By selling its product at prices substantially below the normal cost of production, Spa Selectiva hopes to drive its competitors from the market.This is

Java Bean Company imports coffee beans and sells them under two-year contracts to Mellow Roast, Inc., and other coffeemakers.The contracts require that during the two-year term a coffeemaker not buy beans from Java Bean's competitors.The contracts do not limit the coffeemakers' purchase of tea or other beverage ingredients from other suppliers, however.In the second year of the contract, Mellow Roast protests that this arrangement violates antitrust law.Is Mellow Roast correct If not, why not If so, under which antitrust statute, or statutes, could these contracts be held illegal

For products that are sold nationwide, the relevant geographic market encompasses the entire United States.

Monopoly power may be proved by evidence that a firm used its power to control prices.

A suit is filed against Adroit Drilling Tools Corporation, alleging that the firm committed the offense of monopolization.To determine whether Adroit has monopoly power requires looking at

Big U.S.Oil Company joins with a foreign cartel to control the price of oil.If the cartel has a substantial effect on U.S.commerce

Conditioning the sale of one product on the purchase of another is an exclusive-dealing contract.

Mango Corporation believes that Melon Corporation engages in anticompetitive behavior in an attempt to drive Mango and its other competitors out of the market.Antitrust laws can be enforced against Melon by

Insurance companies are exempt from antitrust laws whenever state regulation exists.