Question

[25] Price fixing occurs when competitors in a market agree on:

A) specific prices to be charged for their products.

B) the price below which they will not sell their products.

C) who will submit the lowest offer when pricing is done with sealed bids.

D) any of the above.

[26] Which of the following would be a per se violation of the Sherman Act?

A) Price discrimination.

B) Trade association activities.

C) Unfair methods of competition.

D) Territorial division by competitors.

[27] If the Federal Trade Commission finds that a business is engaged in unfair competition, it:

A) is acting beyond its jurisdiction.

B) must take the business to court.

C) can issue a cease-and-desist order.

D) must turn the matter over to the Department of Justice.

[28] Which of the following is a tying contract?

A) A quantity discount.

B) Buy one product at full price, buy the second at half price.

C) The purchase of one good is contingent on the purchase of a different good.

D) All of the above.

[29] Interlocking directorates:

A) are per se illegal.

B) could be in violation of the Clayton Act.

C) occur when the sale of one good is tied to the sale of another.

D) occur when regulated utilities must have members of state public service commissions on their boards of directors.

[30] A firm's acquisition of a supplier or distributor is a:

A) vertical merger.

B) horizontal merger.

C) conglomerate merger.

D) interlocking directorate.

Answer 1

25.Price fixing occurs when competitors in a market agree on:

B) the price below which they will not sell their products.

Price fixing is the practice in which competing companies come together to form an agreement , which specifies not to sell their product or service below a specified price.

26. Which of the following would be a per se violation of the Sherman Act?

C) Unfair methods of competition

Sherman Antitrust act of 1890 prohibits

(a) anti competitive agreements

(b) unilateral conduct that monopolizes or attempts to monopolize the relevant market.

The purpose of the Sherman Act is to preserve a competitive marketplace to protect consumers from abuses.

27. If the Federal Trade Commission finds that a business is engaged in unfair competition, it:

C) can issue a cease-and-desist order.

A cease and desist order can be issued by the Court directing the business to stop doing something immediately. Such order places an injunction for the business, naming that activity as illegal.

28. Which of the following is a tying contract?

C) The purchase of one good is contingent on the purchase of a different good.

It in often an illegal practice in which the monopolist company forces the consumer to buy their  particular product/ service , which the customer has no want/ need for, in order to purchase the product / service the consumer wants. Consumers are forced to buy the substandard product/ service in order to avail the product / service they want.

29. Interlocking directorates

B) could be in violation of the Clayton Act.

Interlocking Directorates is having membership as Board of Directors in multiple corporations.

Clayton Act prohibits competing corporations from having common Directors or Officers.

30.  A firm's acquisition of a supplier or distributor is a:

A) vertical merger.

A vertical merger in one which the corporations acquire/ owns  the firms in its Supply chain. For example a Potato chips manufacturing corporation acquires a Potato farm owned by a Farmer/ Planter.