What are tying contracts? How are tying contracts treated by antitrust enforcers?
What will be an ideal response?
Tying contracts are used by producers and require the buyer of one desired product to purchase another product as a condition for obtaining the desired product. They are prohibited under section 3 of the 1914 Clayton Act. The Federal government strictly enforces this provision of the law.
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Refer to Figure 7-3. If there was no quota, how many pounds of peanuts would domestic producers supply?
A) 10 million B) 28 million C) 30 million D) 40 million
If managers do not choose to maximize profit, but pursue some other goal such as revenue maximization or growth,
A) they are more likely to become takeover targets of profit-maximizing firms. B) they are less likely to be replaced by stockholders. C) they are less likely to be replaced by the board of directors. D) they are more likely to have higher profit than if they had pursued that policy explicitly. E) their companies are more likely to survive in the long run.