The Legal Environment of Business: Text and Cases
9th Edition
ISBN: 9781305764460
Author: Frank B Cross/ Roger LeRoy Miller
Publisher: CENGAGE C
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Chapter 27, Problem 2IS
Summary Introduction
Case summary:The Company MC conditions its syrup’s sale on the agreement of the buyer to purchase the pancake mix of MC.
To find: The factors that court will consider while deciding whether this arrangement violates the Clayton act.
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The Federal Trade Commission (FTC) files suit against Yange Corp. under § 2 of the Sherman Act. To be successful,
the FTC must prove that Yange Corp. possesses monopoly power in the relevant market and that the monopoly
power was obtained by illegal means. The FTC has no direct evidence that Yange is using its power to control prices
and restrict output. The FTC, therefore, must show that Yange Corp. has monopoly power indirectly, by showing that
Yange Corp. has a dominant share of the relevant market and that there are significant barriers for new competitors
entering that market. The FTC can calculate the market share that Yange Corp. has by:
showing the total sales that Yange Corp. has ever had.
×
showing the net revenue that Yange Corp. had during their year of highest profits.
looking at the company's sales compared against the total sales of the industry within a specific
period.
taking the total sales of the industry over one year, and comparing against industry sales over prior…
A computer manufacturer terminating an electronic store retailer's contract to sell the manufacturer's computers because the electronic store sold the manufacturer's computers at a price which the manufacturer deemed too low is:
a per se violation of the Sherman Act.
resale price maintenance subject to a rule of reason review.
price fixing.
none of the above.
Lizard Lick Corporation requires all distributors of its lizard salt lick products to sell
the products at specified minimum prices. This resale price maintenance agreement
is
not subject to antitrust law as it deals with products for animal life and the
antitrust laws were implemented to protect people only.
a violation of the Clayton Act.
a per se violation of the Sherman Act.
subject to evaluation under the rule of reason.
just plain wrong and illegal on for numerous reasons.
Chapter 27 Solutions
The Legal Environment of Business: Text and Cases
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