Asked by Annie Mueller on Apr 30, 2024
Verified
Acme Corp.has captured 90 percent of the national market for commodity "X." Acme is most likely to be liable for monopolization under Section 2 of the Sherman Act,if "X" is:
A) felt-tip pens.
B) cellophane.
C) men's socks.
D) yellow notepads.
Monopolization
The dominance of a market sector by a single company, restricting competition and controlling prices and production.
Sherman Act
A landmark federal statute in the field of U.S. antitrust law passed by Congress in 1890, which prohibits monopolistic business practices and promotes competition.
- Evaluate the implications of antitrust laws for business strategies that potentially reduce competition.
Verified Answer
ZK
Zybrea KnightMay 02, 2024
Final Answer :
C
Explanation :
For monopolization charges,the courts first define the relevant product market.A relevant product market is composed of products that meet the functional interchangeability test,which identifies the products "reasonably interchangeable by consumers for the same purposes." Felt-tip pens,cellophane,and yellow notepads fall in the category of interchangeable products while men's socks do not.Therefore,if Acme Corp.has captured 90 percent of the national market for men's socks,then it is liable for monopolization under Section 2 of the Sherman Act.
Learning Objectives
- Evaluate the implications of antitrust laws for business strategies that potentially reduce competition.
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