Coca-Cola,Inc

question 119

Multiple Choice

Coca-Cola,Inc.and PepsiCo,Inc.have only one distributor each in the Phoenix area.The Phoenix market is an intensely competitive soft drink market with prices being among the lowest in the nation.A local restaurateur has requested a dealership from PepsiCo and has been denied.He claims an antitrust violation.Which of the following statements is true?

• A)The denial of the distributorship to someone who can afford it is anticompetitive and is a per se violation.
• B)The denial is justifiable given the level of interbrand competition.
• C)The denial is an example of resale price maintenance.
• D)none of the above

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Definitions:

Price Floor

A legally imposed minimum price that can be charged for a good or service.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price level at a given moment.

Free Market

An economic system where prices are determined by unrestricted competition between privately owned businesses.