Question

English Common law became the basis for American Common Law. What does the Common Law say about damages for parties injured by restraint of trade?
a. They are not permitted
b. Damages can be awarded in full to injured parties
c. Triple damages are awarded to injured parties
d. Only a fraction of damages will be awarded due to statutory restrictions
e. The government could sue for damages on behalf of injured parties, and then give them damages net of taxes

Volume discounts on the purchase of raw materials, components, and inventory often create
a. diseconomies of scale
b. economies of scale
c. rising costs due to the Law of Diminishing Returns
d. a smaller MOS

The Hart-Scott-Rodin Act requires firms that want to merger to
a.   Obtain permission from the courts first
b.   Go ahead with the merger, but be prepared to undo it if the Justice Department or the FTC objects
c.   Obtain permission from either the Justice Department or the FTC, your choice
d.   Obtain permission from both the Justice Department and the FTC
e.   Make a large donation to the Republican Party first

Given the demand curve faced by a firm in a price searcher market, which of the following is not possible
a. charging a higher price while selling fewer products
b. selling more products, but a lower price
c. selling fewer products at a lower price
d. selling more products at a higher price

Answer 1

Answer 1. (b) Damages can be awarded in full to injured parties.

Restraint of Trade is an activity that prevent any party by another party to conduct the business as they would normally do without this type of prevention. These type of activities could be monopoly, unlawful interfering in the business deal, coercing another party to stop competing with other business. Parties that are suffered losses due to these activities can seek for monetory recovery in civil court. Usually damages can be awarded in full to injured parties but it also depends on various factors and decisions of the court.

Answer 2. (b) Economies of Scale.

Volume discount refers to the adjustment of price with the quantity of any product or service. It is an incentive provided by the seller to the buyer when the buyer gives order for threshold or more quantity of the raw materials, components or inventory. By this method the buyer can have the advantage to reduce per unit cost of raw material and that will help him to achieve economies of scale in the business. Economies of scale is the cost advantage for any manufacturer when it is able to reduce per unit production cost or able to reduce inventory cost in the business.

Answer 3. (d) Obtain permission from both the Justice Department annd the FTC.

Hart Scott Rodino (HSR) Act of 1976 is a set of amendments of antitrust law in US, requires the parties to seek permission for merger, acquisitions or transfer of securities or assets from the US Federal Trade Commission and Department of Justice both. The parties should submit premerger notification to these government bodies before completing merger or acquisiton.

Answer 4. (b) Selling more products, but a lower price.

A price searcher is an individual or a business that sells products, services and also influences the price of similar products or services for other sellers by the number of units its selles in the market. A price searcher sets its own prices for the products or serices and able to sell more products or services by keeping the price low. They change the price as per the demand of the products or services in the market. The products or services would be unique in the market.