Fact Pattern 20-2 Vysion Produces TVs It Sells Nationwide. Vysion Contracted with Karol's

question 228

Multiple Choice

Fact Pattern 20-2
Vysion produces TVs it sells nationwide. Vysion contracted with Karol's Appliances to make it the exclusive distributor of Vysion TVs in the San Diego area. Karol's received a promise that Vysion would not sell its TVs to any other retailer within 20 miles of Karol's.
In its San Diego stores, Karol's has a unique pricing policy. A higher price is charged to customers wearing suits than to customers not wearing suits. Karol's salespeople give non-suit-wearing customers 10% discounts off of the list price, and refuse any discounts to suit-wearing customers.
Don's, a rival of Karol's, asked Vysion to allow it to sell its products in San Diego. Vysion refused, pointing to its contract with Karol's. Vysion's distribution policy differs in New York from what it is in California. In New York, Vysion allows every distributor who asks to sell Vysion TVs. However, Vysion requires that New York retailers sign contracts stating that they agree not to sell Vysion products below prices in a monthly "price list" sent by Vysion.
In contracts with its distributors nationwide, Vysion insists that sales of its TVs be tied to sales of its VCRs. No consumer is allowed to purchase a Vysion TV without also buying a Vysion VCR.
-Refer to Fact Pattern 20-2. If Sam's Club and Costco wished to carry Vysion TVs, these stores would be likely to:

• A) approve of and support the price agreement between Vysion and its New York retailers
• B) disapprove of the price agreement between Vysion and its New York retailers
• C) file a Robinson-Patman Act complaint against Vysion
• D) have no reason to care about the price agreement between Vysion and its New York retailers
• E) support the price agreement between Vysion and its New York retailers because of the Dr. Miles Medical case

---

Definitions:

Tend-and-Befriend Response

A behavior exhibited by some individuals under stress, characterized by nurturing activities designed to protect oneself and one's offspring, and forming social alliances rather than fighting or fleeing.

Great Stress

An intense state of physical or emotional strain or tension resulting from adverse or demanding circumstances.

Immune Function

The biological processes and mechanisms within an organism that protect against disease by identifying and killing pathogens and tumor cells.

Short Term

Relating to or occurring over a short period of time, often contrasted with long-term memory or planning.