Question

True or false. No explanation needed

1. The basic purpose of antitrust law is to restrict competition.

________2. Mergers between firms that compete in the same market are vertical mergers.
3. Resale price maintenance agreements are not always illegal, but rather subject to analysis under the rule of reason.

________4. A contract under which a seller forbids a buyer to purchase products from the seller’s competitors is a tying arrangement.

________5. A horizontal restraint of trade results from an agreement between firms at different levels in the manufacturing and distribution process.

________6. Manufacturers are not required to register a pesticide with the EPA unless it has been ruled to pose an unreasonable risk.

_________7. Any discharge into navigable water from a point source is illegal without a state or EPA permit.

Answer 1

1. False, Because antitrust laws are mainly enacted to promote competition and not to discourage it because more the competition, more is the consumer welfare and less the competition, less is the customer welfare because organizations become too huge to be challenged and establish a monopoly where the consumer is put at the receiving end.

2. False. Mergers or consolidation between firms that operate in the same arena, segment, or industry is referred to as horizontal merger. A vertical merger is the consolidation between two firms that produce separate services.

3. False. RPM agreements through various court decisions have been in the bin of illegal per se and not reason per se which makes them illegal with or without rule of reason because it is anti-competitive and invites the wrath of antitrust laws.

4. False. Such a contract is called an Exclusive dealing contract wherein a seller forbids and thereby discourages the buyer of a product to purchase from the seller's competition. Tying arrangement is an agreement between the buyer and seller wherein the buyer ties the sale of a product to some subsequent purchases.

5. False. It is a vertical restraint of trade wherein an agreement between firms who are at the different levels of manufacturing or distribution process is established. Vertical chain comprises of the entire chain of production.

6. False. Manufacturers are required to register under EPA if they do not pose an unreasonable risk to man or the environment, which may be economic, social, or economic costs.

7. True. The Clean Water Act has made it illegal to discharge or release any pollutant from a point source into navigable waters without permission from the National Pollutant Discharge Elimination System (NPDES) under permit program controls discharges.

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