a market in which there is a single seller or a limited number of sellers.
the ability of a firm to dictate prices and exclude competition in a given market.
a type of anticompetitive agreement.
the power of a firm to affect the market price of its product.
Incorrect. This describes a monopoly.
Incorrect. This describes monopoly power.
Incorrect. Market power is not an anticompetitive agreement.
Correct. This does describe market power.
4. Which of the following is a type of anticompetitive agreement that is considered to be so blatantly and substantially anticompetitive that it will be deemed a per se violation of Section 1 of the Sherman Act?
a price-fixing agreement.
a vertical merger.
Correct. Price-fixing agreements constitute per se violations of Section 1 of the Sherman Act.
Incorrect. A boycott is not necessarily a per se violation of Section 1.
Incorrect. A divestiture is not an anticompetitive agreement.
5. Assume that executives from competing producers of the two leading dog-food brands get together and decide to charge a certain price for their lamb and rice dog food. This would be an example of:
a vertical restraint of trade.
a horizontal restraint of trade.
a violation of the Clayton Act.
a violation of an antitrust exemption.
Incorrect. This is not a vertical restraint of trade but rather, a horizontal restraint.
Correct. This is an agreement that restrains competition (in this case, price competition) between rival firms in the same market (the dog-food market).
Incorrect. This is not a Clayton Act violation.
Incorrect. This is not a violation of an antitrust exemption.
6. If the executives in the above question join two other major dog-food manufacturers in an agreement not to purchase any corn from the Iowa Corn Growers’ Cooperative, what kind of anticompetitive action would this be?
A tying arrangement in which the purchase of corn is tied to the sale of dog food.