Chapter 10- Antitrust Law (Restraints of Trade)

Question 1

Preservation of Competition

Answer 1

Generate the best products and services at the lowest possible price.
Antitrust laws were designed to provide free, open markets resulting in efficiency and consumer welfare

Question 2

Preservation of Democracy

Answer 2

Many businesses in competition meant that none of them could corner economic, political or social power

Question 3

Preservation of Small Business

Answer 3

Antitrust was designed to preserve the opportunity for ordinary people to compete with corporations

Question 4

Expression of Political Radicalism

Answer 4

Antitrust laws for reshaping individuals meet the needs of all people

Question 5

Sherman Antitrust Act

Answer 5

Section 1- Forbids restraints of trade
Section 2- Forbids monopolization, attempts to monopolize and conspires to monopolize

Question 6

Federal Trade Commission (FTC)

Answer 6

A powerful, independent agency designed to eliminate anticompetitive practices in commerce.
Ex: Cease and desist or fines

Question 7

Horizontal Restraint of Trade

Answer 7

Collude, Conspire or agree among themselves in ways that unreasonably harm competition
Governed by Section 1 of The Sherman Act which forbids contracts, combinations or conspiracies in restraint of trade

Question 8

Rule of Reason

Answer 8

Provides that the Sherman Act forbids only unreasonable restraints of trade

Question 9

Horizontal Group Boycott

Answer 9

Competitors agree not to deal with a supplier, customer or another competitor

Question 10

Horizontal Restraints

Answer 10

Agreement among the competitors, Per se unlawful

Question 11

Vertical Restraints

Answer 11

Imposed by suppliers on their buyers

Question 12

Resale Price Maintenance

Answer 12

1- Minimum price to enhance the reputation of the product
2-Helping retailers make a profit sufficient to provide customer service
3- Preventing discount stores from pricing beneath full-price retail outlets
4- Prevent Free Riding
5- Reducing Showrooming

Question 13

Tying Arrangements

Answer 13

Dealer agrees to sell or lease a product (tying product) only on the condition that the buyer also purchases or leases another product (Tied product)

Question 14

Exclusive dealing contract

Answer 14

Buyer commits itself to deal only with a specific seller

Question 15

Requirements Contract

Answer 15

One in which a seller agrees to supply all of a buyer’s needs or a buyer agrees to purchase all of a sellers output

Question 16

Market Foreclosurer

Answer 16

Competitors are denied a source of supply or a market for sale