The type of mergers that the Federal Trade Commission will most likely challenge are
A) mergers of firms within a relevant market.
B) mergers of firms in different markets.
C) mergers of firms that will generate economies of scale.
D) mergers of firms in different geographical locations.
17) In the United States, antitrust enforcement focuses on
A) the profitability of the leading firms in an industry.
B) the degree of market concentration within a market.
C) the average level of prices charged by firms.
D) the price-cost margin of an industry.
18) The key issue in determining the relevant product market is
A) the degree of interchangeability between products.
B) the specific geographic area in which competing products overlap.
C) the production processes used to produce the goods.
D) the market share test.
19) Offering two or more products for sale as a set is known as
D) product sharing.
20) The United States as a whole would be inappropriate as the relevant geographic market when an antitrust case involved
A) ABC and NBC.
B) two auto producers.
C) two steel producers.
D) two concrete producers.
21) If bottled water, soft drinks and juices are included in the definition of the beverage market, then the relevant definition of the market is defined by
A) the locations of products that are produced.
B) the low degrees of substitution between products in the market.
C) the high degrees of substitution between products in the market.
D) a low level of competition among firms producing those products.
22) The main goal of antitrust policy is to
A) encourage firms to produce at the MR = demand level.
B) regulate natural monopolies.
C) prevent the monopolization of industries.
D) prevent the nationalization of industries.
23) The first step in enforcing any antitrust policy is to
A) win the support of the public.
B) win congressional approval.
C) win the approval of the state senators from the state where the company is headquartered.
D) define the market.
24) Clarke's gas station in Podunk only sells gasoline if customers also purchase oil.
A) This is called a tie-in sale and is in violation of antitrust laws.
B) This is not in violation of antitrust laws, as cars need both oil and gas.
C) This is not in violation of antitrust laws, as consumers get the oil below market prices.
D) This is in violation of the Robinson-Patman Act.
25) When companies sell slightly different forms of a product to different groups of customers, this is known as
A) market testing.
26) The U.S. antitrust enforcers will likely block a merger if
A) the merging firms already earn excessive profits.
B) the merging firms are in different markets.
C) the merger will substantially increase market power.
D) the degree of concentration declines as a result of the merger.
27) Which of the following mergers would most likely be challenged by the Federal Trade Commission?
A) Two restaurants in a large metro area
B) Two largest wireless service providers in the U.S. wireless communication industry
C) An automaker and an insurance company
D) One oil refinery in the U.S. and another oil refinery in Canada
28) One of the agencies responsible for enforcement of antitrust policy is
A) the Trust Division of Congress.
B) the Federal Trade Commission.
C) the World Trade Organization.
D) the Food and Drug Administration.
29) Enforcement of antitrust policy is the responsibility of
A) the Trust Division of Congress and the World Trade Organization.
B) the Federal Trade Commission and the Antitrust Division of the Department of Justice.
C) the World Trade Organization and the FDA.
D) the Food and Drug Administration and Congress.
30) A measure of monopoly power used by the government is the
A) percentage share of the relevant market or market share test.
B) profit of the firm compared to other firms in the industry.
C) price charged by the firm for goods and services.
D) percentage difference between price and marginal cost.
31) When Microsoft put together a set of products with the Windows operating system, it was practicing
B) tie-in sales.
32) What is the difference between product versioning and product bundling? Which of these two business practices have antitrust authorities been more likely to regard to be the form of price discrimination called tie-in sales? Why?
33) What is the difference between holding a monopoly and monopolization? Which is illegal? Explain.
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