In each of the following situations, the firm might possibly be accused of a res

Question

In each of the following situations, the firm might possibly be accused of a restrictive practice: exclusive dealing, minimum resale price maintenance, tie-in sales, or predatory pricing. In each case, identify which restrictive practice might apply, and then explain briefly whether you think this behavior is more likely or less likely to be treated as an antitrust case. A firm is selling its new drug to reduce high blood pressure, but it requires that people who buy the drug also order a minimum quantity of low-fat foods from their website. A large retail store signs contracts to become the only store in a metropolitan area that can sell a certain brand of a special new vacuum cleaner. There is only one Peruvian restaurant in a certain town, and it is very popular. But then a Venezuelan restaurant with similar food opens down the street, and the Peruvian restaurant cuts its prices. A small airline that has been offering cheap flights from New York to London goes out of business, and the large airlines remaining in the market raise their prices substantially. A company selling a new brand-name camera requires that no retail store selling the camera will put the camera on sale. A local steel company has been selling Its products to a local automobile factory for years. But now, the auto company says that it Is planning to purchase lower-priced imported steel in the future. A large retail store signs a number of contracts so that it can be the only store in a large metropolitan area to sell all brands of vacuum cleaners.

Explanation / Answer

Ans1: It is Tie in sales. It is more likely to be treated as an antitrust case as it is like an extension of monopoly.

2: It is exclusive dealing. It is an antitrust case as it lessen competition or tends to create monoploy.

3: It is Predatory pricing. It is illegal as it is done to drive out competitors from the market.

5: It is exclusive dealing. this activity is an unfair practice .

6: It is exclusive dealing. It is illegai due to Restrictive Trade Practice Act.

7: It is exclusive dealing. it creates monopoly which is illegal.

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