7. Challenging Market Dominance and Price-Fixing Scheme Flashcards
Many unseen and unforeseen factors are driving today’s wheel of fortune and the game of ________.
hypercompetition
With the spreading trade liberalization and deregulation, there is now closer integration of domestic and international markets.
Globalization
The increasing significance of _________ is also contributing to the rapid integration of markets.
electronic commerce
The fast developments in new ______, such as biotechnology, mechatronics, robotic medicine, and materials science, lead to the increased flow of new products and services that substitute for or totally replace existing ones..
scientific fields
To meet new terms of competition, enterprises must build ________ based on innovation in soft and hard technology, industrial, upgrading, flexibility, agility, and adaptability, and improved total productivity.
competitive advantage
can drive businesses into making a lot of money and into changing the rules of competition.
Profit maximization
Business becomes obsessed with ______ and ________ and more revenues by any means and at any price.
return of investment and return of assets
exists in various forms. It varies from misleading advertisements to copying of another’s trademarks and products, from subtle destruction of the reputation of competitors by making false statements to plain and simple fraud, from technology piracy to personnel piracy.
Unfair competition
The modern corporation, with its limited liabilities and immense financial power, emerges as the ________ form of business organization.
dominant
When a powerful firm become even more powerful, it builds up a tempting tendency to create a _______ or ________ that could control an entire industry.
monopoly or trust
A ______, _______, or a _______ is organized for the purpose of eliminating competition.
trust, monopoly, or a cartel
A _____ was a particular technique developed in the late 19th century to consolidate firms and acquire control in a variety of industries.
trust
is a basic federal enactment regulating the operations of corporate trusts, passed by the US Congress in July 1890. The act declared illegal “every contract, combination in the form of trust (monopoly) or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations”
Sherman Antitrust Act
______ prohibit a variety of practices that restrain trade or restrict free and fair competition, such as price-fixing conspiracies and predatory acts designed to achieve or maintain monopoly power.
antitrust laws
Certain practices, such as _______ between competitors, are so inherently harmful to customers that a detailed examination is not necessary to determine whether they are reasonable.
price fixing
In many countries, antitrust laws presume that ______ and ________ are outright violations of fair competition and condemn them almost automatically.
price fixing and market sharing cartels
In some cases, a single company can acquire enough ________ by organic growth to dominance a market.
market power
A ___________ has a special social responsibility not to misuse its market power in a way that distorts fair competition - but the temptation is just too strong and persistent.
dominant company
is an agreement (written, verbal, or inferred from conduct) among competitors to raise, lower, maintain, or stabilize prices or price levels.
price fixing/price fixing scheme
Either declare a price war or agree to fix prices. That is because price often is the principal way by which several firms compete.
price fixing/price fixing scheme
Conspiracy between the competitors about the prices they will charge to customers or pay to suppliers for goods or services are generally amongst the most serious _________ of applicable antitrust rules.
infringements
Often referred to as “collusion”, and in stronger term as “economic conspiracy”, this sort of agreement undermines the system of free enterprise.
price fixing scheme
“Hard core”, clear or blatant, price fixing between competitors is illegal and is subject to ________ in many countries.
criminal prosecution
The antitrust prohibition on fixing prices also extends to agreements between competitors on _______ matters such as discounts, rebates, commissions and credit terms.
price-related
T/F: The general rule is that we cannot just impute illegal collusion on anybody without substantial evidence.
T
requires business to effectively calculate the resources and needs, the forces of supply and demand.
pricing process
T/F: Failure to calculate the supply and demand is a manifestation of the organization’s bad practice and the damaging effect will immediately be seen in prices.
T
T/F: If prices are distorted or deliberately manipulated, then a disorder in the market may be created which eventually may lead to the decline of production and consumption.
T
A _______ is one in which both the buyer and the seller are given what is due to them.
just price
T/F: The question of price fairness cannot be examined apart from the principle of economic justice.
T
the one who sets the ethical principle regarding what is to be considered a just price.
St. Thomas Aquinas
“Buying and selling were instituted for the common good of both parties since each needs the products of the other… Therefore, the contract between them should rest upon an ________”
equality of thing to things
“The measure of the value of a thing which is exchanged should be given by its ______. Hence to sell a thing dearer or to buy it cheaper that it is worth is unjust”
money price
Accordingly, ____ requires that the exchange of ownership of goods and money is equitable and fair, and that the business should ensure that the value of the goods or services given is equivalent to the payment received.
justice
is an acceptable medium of exchange and the basic equivalence in monetary terms is a just price.
money
T/F: Increasing/decreasing of prices is permissible in certain circumstances - under the dictate of economics.
T
T/F: Such reasonable increase of prices may be done under regulation by the government agency in charge and always with the common good in mind unless the product is under deregulation law.
T
is essential to the preservation of competition and to its best development just as it is necessary to the preservation and development of civil or political liberty.
Regulation
Unlicensed liberty leads necessarily to _____ or ______
despotism or oligarchy
T/F: Common sense dictates that you should decrease the price when there is an abundance or oversupply of goods and a decrease in demand.
T
T/F: You have to increase price when there is deflation or scarcity of purchasing power.
F: decrease
T/F: The fundamental principle behind the almost automatic permission to increase decrease prices is the promotion of a free and competitive market when there is an honest consideration about the value of goods.
T
T/F: Pricing is ethically correct when the market is sufficiently competitive.
T
is supposed to be the one where the buyer and seller in the market receive the exact value of his money and goods, the exact worth of what each contributes to other.
Natural Equilibrium Level
If not continually safeguarded and when strong competitors collude to achieve higher profits (otherwise known as _______), a free competitive market can easily become an oligopoly.
cartel
is not a simply a question of a company having a large market share. several factors have to be taken of into account as well as market share.
Market Dominance
_____ can only exist in relation to a particular product and geographic market.
dominance
T/F: It is generally not illegal to gain a position of market power (monopoly/dominance), but antitrust laws generally make it unlawful to maintain or to abuse a monopoly through tactics that either unreasonably exclude firms from the market or significantly impair the ability of others to compete.
T
Unilateral actions, or a violation may result if a group of firms together monopolize a market ___
collective dominance
In relation to suppliers, _____ means that the relevant company has sufficient market power to restrict output and raise price above level that would prevail in a competitive market, without existing rivals or new entrants.
dominance/market dominance
Moral failure of a monopoly lies in the exorbitant prices it commands without any resistance from anyone. An act violating commutative justice.
Abuse of Market Dominance
is a compulsive type of market where unethical practices and social capriciousness regularly prevail.
Monopoly
is where a single (mono) firm is the only seller or producer and where new sellers and thwarted off to compete.
monopoly market
T/F: Prices controlled are below the equilibrium level.
F : above
T/F: The single firm in a monopoly market can control the prices of the available goods and services, wherein the price for the products or services is set above the natural equilibrium level.
T
A _____ or a _____ can enable the single company or few companies to reap high profit without exactly improving the quality of the products or services.
monopoly or a cartel
