Other Horizontal Restraints: Types, Effects, and Legal Implications

Question 1

Under Section 1 of the Sherman Act, which element is NOT required to establish a group boycott?

Accepted Answer

Actual harm to competition

Answer

Agreement to refuse dealing with a specific party

Answer

Intent to restrict trade

Question 2

Which of the following is NOT a potential consequence of an antitrust violation?

Accepted Answer

License revocation for professionals

Answer

Injunctions to prevent further violations

Answer

Treble damages to compensate victims

Answer

Criminal penalties for individuals and corporations

Question 3

A tying arrangement under antitrust law occurs when a seller:

Accepted Answer

Conditions the sale of one product on the purchase of another product

Answer

Requires customers to buy a bundle of products at a higher price

Answer

Refuses to sell a product to customers who purchase from competitors

Answer

Discriminates in pricing based on the quantity of products purchased

Question 4

Vertical restraints of trade involve agreements between parties operating at:

Accepted Answer

Different levels of the distribution chain

Answer

The same level of the distribution chain

Answer

The same level of production

Answer

Different levels of production

Question 5

Which of the following is NOT a potential remedy for an illegal horizontal restraint of trade?

Accepted Answer

Government regulation

Answer

Injunctions

Answer

Divestiture

Answer

Treble damages

Question 6

Which of the following is not an element of a group boycott, as defined under Section 1 of the Sherman Act?

Accepted Answer

Minimal impact on the relevant market

Answer

An agreement among two or more businesses

Answer

A coordinated refusal to deal with a specific competitor

Answer

Intent to restrain competition

Question 7

Horizontal restraints of trade are inherently illegal under antitrust laws. True or False?

Accepted Answer

False

Answer

True

Question 8

Which of the following is NOT an essential element of a group boycott under Section 1 of the Sherman Act?

Accepted Answer

The purpose of the agreement is to harm the targeted company

Answer

An agreement between multiple parties to refuse to deal with a target company

Answer

An actual or potential effect on competition

Answer

A coerced agreement or concerted action

Question 9

The 'naked restraint' doctrine holds that:

Accepted Answer

Agreements without any legitimate business purpose are illegal

Answer

Agreements between competitors to fix prices are per se illegal

Answer

Agreements between competitors to divide territories are illegal per se

Answer

Non-competition agreements are illegal per se

Question 10

A tying arrangement involves:

Accepted Answer

Requiring the purchase of a separate product or service as a condition of buying a desired product or service

Answer

Agreements between competitors to divide territories

Answer

Group boycotts that involve the refusal to deal with a targeted company

Answer

Agreements that prohibit competition between competitors

Question 11

Which of the following is NOT a potential anticompetitive effect of a tying arrangement?

Accepted Answer

Increased consumer choice

Answer

Increased market power for the tying product seller

Answer

Reduced competition in the tied product market

Answer

Higher prices for both the tying and tied products

Question 12

What is the primary distinction between collusion and conscious parallelism in antitrust law?

Accepted Answer

Collusion involves explicit or implicit agreements, while conscious parallelism involves unilateral actions taken by independent actors.

Answer

Conscious parallelism involves explicit or implicit agreements, while collusion involves unilateral actions taken by independent actors.

Answer

Collusion is always illegal, while conscious parallelism is never illegal.

Question 13

Which of the following is NOT a type of tying arrangement?

Accepted Answer

Cross-selling

Answer

Product tying

Answer

Service tying

Answer

Block booking

Question 14

Which of these is NOT considered an exclusive dealing arrangement?

Accepted Answer

Price fixing

Answer

Tying contracts

Answer

Full-line forcing

Answer

Exclusive distributorship agreements

Question 15

Under Section 1 of the Sherman Act, an exclusive dealing arrangement is deemed illegal if it:

Accepted Answer

Substantially forecloses the relevant market

Answer

Involves a dominant firm

Answer

Is ancillary to a genuine business purpose

Answer

Is formed with a new market entrant

Question 16

Which of the following is NOT a potential anti-competitive effect of horizontal restraints of trade?

Accepted Answer

Increased efficiency

Answer

Increased market power

Answer

Reduced output

Answer

Higher prices

Question 17

Which of the following is NOT an element of a group boycott in the United States?

Accepted Answer

Government compulsion

Answer

Agreement among competitors

Answer

Refusal to deal with a specific target

Answer

Purpose of coercing the target

Question 18

A tying arrangement in the United States involves:

Accepted Answer

Refusing to sell one product unless the buyer also purchases another

Answer

Selling two products together

Answer

Offering discounts for purchasing multiple products

Answer

Setting minimum resale prices

Question 19

Which of the following factors is NOT considered in the rule of reason analysis of a tying arrangement?

Accepted Answer

Market share of the tied product

Answer

Degree of market power

Answer

Purpose of the arrangement

Answer

Impact on competition

Question 20

Which of the following is NOT a factor used to determine a firm's market power in the United States?

Accepted Answer

Consumer loyalty

Answer

Market share

Answer

Barriers to entry

Answer

Control over essential facilities

Question 21

Under the rule of reason analysis for horizontal restraints of trade, how do 'pro-competitive justifications' influence the evaluation and potential outcome of a case?

Accepted Answer

Pro-competitive justifications can challenge the presumption of illegality under the rule of reason.

Answer

Pro-competitive justifications always provide a complete defense against horizontal restraints of trade.

Answer

Pro-competitive justifications are not considered in the rule of reason analysis.

Question 22

What is the primary goal of the Clayton Act's prohibition on tying arrangements?

Accepted Answer

To prevent firms with market power in one market from using that power to gain an advantage in another market.

Answer

To encourage competition among suppliers.

Question 23

Which of the following is an example of a tying arrangement?

Accepted Answer

Requiring a buyer to purchase a specific brand of printer paper to use with a particular printer.

Answer

Offering a discount for purchasing multiple products from the same seller.

Question 24

In a monopolization case based on predatory pricing, what is the primary legal defense?

Accepted Answer

Cost justification, demonstrating that the prices charged were not below cost.

Answer

High market share.

Answer

Intent to harm competitors.

Question 25

What is the main objective of the Robinson-Patman Act?

Accepted Answer

To prohibit price discrimination that may lessen competition or tend to create a monopoly.

Answer

To promote fair competition among businesses.

Answer

To protect consumers from inflated prices.

Question 26

Section 2 of the Sherman Act primarily focuses on prohibiting:

Accepted Answer

Monopolization, attempts to monopolize, and conspiracies to monopolize.

Answer

Mergers and acquisitions.

Answer

Price discrimination.

Question 27

Which of the following is a valid pro-competitive justification for an exclusive dealing arrangement?

Accepted Answer

Increasing efficiency by reducing transaction costs

Answer

Preventing competitors from entering the market

Answer

Raising prices to consumers

Question 28

Which of the following is NOT a potential anticompetitive effect of a concerted refusal to deal?

Accepted Answer

Increased consumer choice

Answer

Reduced innovation in the affected market

Answer

Foreclosure of downstream market competition

Answer

Higher prices for the goods or services being withheld

Question 29

Which of the following is a form of group boycott, where a group of businesses agree to collectively refuse to deal with a particular entity?

Accepted Answer

Concerted refusal to deal

Answer

Exclusive dealing

Answer

Price fixing

Answer

Market allocation

Question 30

In assessing the legality of an exclusive dealing arrangement, which of the following factors is generally NOT considered?

Accepted Answer

The subjective intent of the parties involved

Answer

The duration of the agreement

Answer

The market share of the parties involved

Answer

The potential impact on competition

Question 31

A tying arrangement involves the:

Accepted Answer

Conditioning of the sale or lease of one product (the tying product) on the purchase or lease of a separate product (the tied product)

Answer

Allocation of market territories between competitors

Answer

Refusal to deal with a particular supplier

Question 32

Which of the following is NOT a potential pro-competitive justification for a tying arrangement?

Accepted Answer

Increased profits for the seller

Answer

Elimination of free-riding

Answer

Increased efficiency

Answer

Improved product quality or consumer convenience

Question 33

A group of competing gas stations agrees to all charge the same price for gasoline. This agreement is most likely considered:

Accepted Answer

A per se violation of the Sherman Act

Answer

A rule of reason violation of the Sherman Act

Answer

Legal under the Sherman Act, as long as the price is fair and reasonable

Answer

Legal under the Clayton Act

Question 34

A group of dentists agrees not to accept patients referred by a competing dental clinic. This agreement is an example of a:

Accepted Answer

Group boycott

Answer

Merger

Answer

Vertical restraint

Answer

Tying arrangement

Question 35

When applying the rule of reason to a group boycott, courts typically consider all of the following EXCEPT:

Accepted Answer

The number of companies involved in the boycott

Answer

The market power of the boycotters

Answer

The purpose of the boycott

Answer

The effect of the boycott on competition

Question 36

A manufacturer requires its retailers to only sell its products and not those of its competitors. This practice is known as:

Accepted Answer

Exclusive dealing

Answer

Price fixing

Answer

Group boycott

Answer

Tying arrangement

Question 37

One potential pro-competitive benefit of exclusive dealing arrangements is that they can:

Accepted Answer

Encourage investment in product promotion and distribution

Answer

Reduce consumer choice

Answer

Increase the market power of the manufacturer

Question 38

To prove a violation of antitrust law based on an exclusive dealing arrangement, a plaintiff must demonstrate that the agreement:

Accepted Answer

Has a substantial impact on competition in the relevant market

Answer

Is motivated by a desire to eliminate competitors

Answer

Is unfair to the parties involved

Question 39

A company offers its customers a discount if they purchase both its software and its hardware. This practice is likely considered a(n):

Accepted Answer

Tying arrangement

Answer

Price fixing agreement

Answer

Exclusive dealing arrangement

Answer

Merger

Question 40

For a tying arrangement to be considered illegal under antitrust law, it is NOT required that:

Accepted Answer

The tied product must be of inferior quality

Answer

A substantial amount of commerce in the tied product must be affected

Answer

The buyer must be forced to purchase the tied product

Answer

The tying product must have sufficient market power

Question 41

A manufacturer refuses to sell its product to a retailer who also sells the products of a competing manufacturer. This practice is most likely considered a(n):

Accepted Answer

Refusal to deal

Answer

Tying arrangement

Answer

Price fixing agreement

Answer

Group boycott

Question 42

A potential defense to a claim of illegal refusal to deal is that:

Accepted Answer

The refusal is justified by legitimate business reasons

Answer

The refusing company has a monopoly in the market

Answer

The refusing company is motivated by a desire to eliminate competition

Question 43

Which of the following is NOT an element of a group boycott?

Accepted Answer

Agreement to boycott competitors

Answer

Coercion or intimidation

Answer

Absence of a legitimate business justification

Answer

Concerted refusal to deal with a specific target

Question 44

Exclusive dealing arrangements are illegal per se when:

Accepted Answer

They cover more than 50% of the relevant market.

Answer

They are entered into by dominant firms.

Answer

They have a substantial anticompetitive effect.

Answer

They involve tying arrangements.

Question 45

The 'rule of reason' is applied to exclusive dealing arrangements when:

Accepted Answer

Their impact on competition is unclear.

Answer

They are entered into by small businesses.

Answer

They cover a significant market share.

Question 46

Which of the following is a potential justification for an exclusive dealing arrangement?

Accepted Answer

Achieving economies of scale

Answer

Preventing entry of new competitors

Answer

Raising prices to consumers

Question 47

Tying arrangements are considered illegal per se when:

Accepted Answer

The tying product is dominant in the market.

Answer

The arrangement is entered into by a small business.

Answer

The arrangement forecloses competition in the tied product market.

Answer

The tied product is not essential to the use of the tying product.

Question 48

A horizontal merger is more likely to be anticompetitive if:

Accepted Answer

The merging firms compete directly in the same market.

Answer

The post-merger market share is below 50%.

Answer

The merging firms are of different sizes.

Question 49

The Herfindahl-Hirschman Index (HHI) measures:

Accepted Answer

Market concentration

Answer

Industry barriers to entry

Answer

Firm profitability

Answer

Market share

Question 50

Which of the following is a potential defense to a horizontal merger challenge?

Accepted Answer

The merger will create efficiencies that outweigh any anticompetitive effects.

Answer

The merging firms are in different geographic markets.

Answer

The merger will increase consumer choice.

Question 51

The Clayton Act's Section 7 prohibits mergers that:

Accepted Answer

Substantially lessen competition

Answer

Increase market concentration

Answer

Reduce consumer welfare

Answer

Harm small businesses