Question

help me answer these :)

1. *answer is not b*

Four grocery stores account for 80 percent of the retail food sales in Metro City. Two of the stores want to merge. In determining whether the merger violates the Clayton Act, the most crucial factor is

a. the market value of the firms’ shares in the stock market.

b. the total value of the market in relation to the stock for sale in the stores.

c. the market shares of the firms in their market.

d. the comparative value of each store in a market for their sale.

2. * answer is not b*

Baby Goods Inc. buys Child Shops Inc. in an attempt to gain monopoly power. Remedies that a court might impose in a suit against Baby Goods for a violation of the antitrust laws include

a. funding new entries to the relevant market.

b. all of the choices.

c. using its market power to encourage increased competition.

d. divesting itself of the control or ownership of Child Shops.

3. * answer is not d*

With respect to antitrust violations, the Federal Trade Commission does not enforce

a. the Sherman Act.

b. any of the federal antitrust laws.

c. the Clayton Act.

d. the Federal Trade Commission Act.

4. * answer is not b*

With respect to anticompetitive behavior, the Federal Trade Commission Act prohibits

a. all forms not covered under other federal antitrust laws.

b. only forms covered under other federal antitrust laws.

c. civil violations of the Sherman Act.

d. criminal violations of the Clayton Act.

Answer 1

1.

Four grocery stores account for 80 percent of the retail food sales in Metro City. Two of the stores want to merge. In determining whether the merger violates the Clayton Act, the most crucial factor is the market shares of the firms in their market.

c. The market shares of the firms in their market.

Explanation: A horizontal merger will lessen the competition by changes in the market share change in concentration ratio and trend in the industry towards concentration. The market share of the merging companies and impact on their concentration ratio will determine if they are violating the Clayton act.

2.

Baby Goods Inc. buys Child Shops Inc. in an attempt to gain monopoly power. Remedies that a court might impose in a suit against Baby Goods for a violation of the antitrust laws include divesting itself of the control or ownership of Child Shops

d. divesting itself of the control or ownership of Child Shops.

Explanation: The antitrust laws recommend remedies such as breaking the company into two parts, prohibiting certain business conduct and imposing fines.

3.

Concerning antitrust violations, the Federal Trade Commission does not enforce

Ans: a. the Sherman Act

Explanation: FTC technically does not enforce the Sherman act nut it can bring about a case under the FTC act against the same kind of activities that violate the Sherman act.

4.

Concerning anticompetitive behavior, the Federal Trade Commission Act prohibits

Ans a.all forms not covered under other federal antitrust laws.

Explanation: FTC Prohibits an unfair method of competition in interstate commerce but carries no criminal penalties.