All of the Following Most Likely Indicate That a Direct

question 4

Multiple Choice

All of the following most likely indicate that a direct selling organization is legitimate EXCEPT ________.

• A) having low entry barriers
• B) clarifying the firm's code of ethics
• C) paying for the recruitment of downline members
• D) basing rewards mostly on product and service sales
• E) accepting any unsold merchandise for a partial refund

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Definitions:

Rule of Reason

A legal doctrine used in antitrust law stating that trade practices are only unlawful if they unreasonably restrain trade.

Competition

The activity or condition of competing against others for the same objective or for superiority in a field.

Clayton Act

A piece of U.S. legislation aimed at increasing economic competition and preventing monopolies by prohibiting certain types of anti-competitive practices.

Lessen Competition

Strategies or situations that reduce the intensity of rivalry among existing competitors in a market.