Fact Pattern 16-2 Number One Oil Company Sells Gas to Various Gas Stations

question 34

Multiple Choice

Fact Pattern 16-2
Number One Oil Company sells gas to various gas stations. Number One requires that the gas stations agree that they will not sell gas above a certain maximum price set by Number One. Some of the gas stations are unhappy with the arrangement because they wish to sell gas at any price they choose. Unfortunately for them, other oil companies in the region also impose maximum price restrictions. The station owners begin investigating whether any antitrust violation could be involved.
-Refer to Fact Pattern 16-2.Which of the following is true regarding whether the imposition of maximum prices under the facts presented would be an antitrust violation?

• A) The U.S.Supreme Court has ruled that such restrictions do not violate federal antitrust law.
• B) The imposition of maximum pricing restrictions is per se illegal under federal antitrust law.
• C) A rule of reason approach is used in determining whether the imposition of maximum prices is illegal under federal antitrust law.
• D) A presumption of reasonableness approach is used in determining whether the imposition of maximum prices is illegal under federal antitrust law.

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Definitions:

Competitive Advantage

An attribute or set of attributes that allows an organization to outperform its competitors.

Sustainable Competitive Advantage

Sustainable competitive advantage exists through realising cost and quality, knowledge and speed, creating a market stronghold and protecting financial resources.

Strategic Management

involves the formulation and implementation of the major goals and initiatives taken by a company's top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization competes.

Social Responsibility Objectives

Goals that aim to improve community well-being and protect the environment as part of an organization's operations.