Question 40

Fast Food Corporation (similar to McDonald's) merges with Big Cattle Farms, Inc (a cattle farm that produces the beef used in Fast Food Corp's burgers). This merger is

Question 40 options:

1)	a vertical merger

2)	a product extension merger

3)	a conglomerate merger

4)	a horizontal merger

Question 41

Apple, Samsung and Microsoft all compete in manufacturing cell phones. Assume there are interoperability issues for some applications making it difficult to share photos between the different phones/operating systems. The three companies schedule a meeting to get together and talk about developing an industry standard for photographs to allow for each company to manufactured and program its phones to work to the industry standard. Select the best legal analysis.

Question 41 options:

1)	Antitrust law strongly discourages meeting with your competitors and forbids entering into an "agreement" with competitors.

2)	Antitrust law allows competitors to meet to discuss developing or modifying industry standards.

3)	The only exception to this being an antitrust violation is if the companies are getting together to plan a lobbying effort to get Congress to adopt an industry standard.

Question 42

Archer Daniels accuses six railroad companies of agreeing to fix price by all imposing similar fuel surcharge on customers. Assume the railroads did agree to do so in a trade association meeting and Archer Daniels can prove it. Archer Daniels brings a motion to have the railroad's action considered as a per se violation of the antitrust rules against price fixing. The railroads argue that the case should be decided according to the rule of reason. Why is this issue important to the litigants?

Question 42 options:

1)	If the railroads win this motion and the rule of reason applies, they will almost certainly win the case.

2)	The railroads must win this motion and have the rule of reason apply in order for them to argue the merits of the fuel surcharge (an argument they may still lose).

3)	If Archer Daniels can win this motion and the per se rule against price-fixing applies, it will almost certainly win the case.

4)

B & C

Question 43

Dave owns a trash removal and recycling company named Dave's Trash Keep. Assume Dave has only one competitor in the trash removal market, Jim, of Jim's Junkyard Dogs, but he thinks that one competitor is one too many. Dave meets with Jim and they agree to divide the town into two separate districts. Each person agreed only to pick up trash in his own district. There was no procompetitive effect from allocating the town between them. What type of antitrust violation have Dave and Jim engaged in?

Question 43 options:

1)	A vertical restraint.

2)	Price discrimination.

3)	A horizontal restraint.

4)	None of the above

5)	All of the above.

Question 44

The Department of Justice brings a charge of price fixing against the only two limousine services in the city. Both limousine companies charge the same price for nearly all their fares. In order for the two companies to be found guilty, the government must prove that the parties agreed to fix prices.

Question 44 options:

	1) True
	2) False

Question 45

Gigantic Corp. just entered a new market that is dominated by many small firms serving different geographic areas. Gigantic Corp. has determined that it can take a large share of the market by using a national distribution model and national branding. Sure enough, Gigantic Corp. comes to dominate the market (over 75%). Smaller competitors complain to the Department of Justice that they have been harmed and that Gigantic is trying to form a monopoly. Has Gigantic violated the antitrust laws?

Question 45 options:

1)	Yes, by definition any company with over 70% market share violates the law and must divest assets to get below 70%.

2)	No, it is not illegal to obtain a monopoly through business acumen and economies of scale.

3)	No, Gigantic is not a monopoly if it only controls 75% of the relevant market.

4)	Yes, Gigantic knew its business model was better and would hurt small providers and is therefore guilty of monopolistic behavior because it offers a superior product.

Question 46

You buy a computer from Zippy Discount Computers. The Zell Computer you purchased had a special sticker inside the box that stated: "Zell's normal warranties do not apply to this refurbished computer. ZELL DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND SELLS THIS COMPUTER AS IS." Zippy Discount Computers; however, failed to have its own warranty disclaimer. The computer does not work and you return it to Zippy. Zippy refuses to accept it back and you sue. Who wins?

Question 46 options:

1)	You do because merchants automatically grant an implied warranty of merchantability to their goods sold.

2)	You do because consumer protection laws allow you to return any product that does not work regardless of disclaimers.

3)	Zippy wins because it is only the seller of the computer and not the manufacturer.

4)	Zippy wins because Zell's disclaimer also grants Zippy a disclaimer.

Question 47

You own COOL LOOKS, Inc., a manufacturer of sunglasses. Your sunglasses contain premium components, improve vision and reduce eye strain. None of this is immediately noticeable just by looking at the sunglasses so consumer education is important to your sales success. You require your distribution channel to enter into a contract with you that requires the retailer to: (1) have its sales people engage in a three hour online training session prior to selling COOL LOOKS, (2) the store to build a special display case for the sunglasses that highlights the features of the glasses and (3) to agree not to sell COOL LOOKS below a retail price minimum set and maintained by COOL LOOKS. Is this contract legal?

Question 47 options:

1)	No, retail maintenance price fixing is illegal under the rule of reason and there is no good reason to fix the price in this case.

2)	Yes, you are setting a retail price minimum and have a good reason for doing so.

3)	No, retail maintenance price fixing is per se illegal under the Sherman Antitrust Act.

4)	Yes, you are setting a retail price maximum and have a good reason for doing so.