Restraints of Trade That Are Unlawful Under Section 1 of the Sherman

question 62

Multiple Choice

Restraints of trade that are unlawful under Section 1 of the Sherman Act if their anticompetitive effects outweigh their procompetitive effects are known as ________.

• A) nonprice vertical restraints
• B) group boycotts
• C) division of markets
• D) resale price maintenance measures

---

Definitions:

Minimum Efficient Scale

The smallest level of production at which long-term average total costs are minimized.

Natural-Monopoly Situation

A market condition in which a single firm can produce output at a lower cost than can multiple firms, leading to a monopoly justified by efficiencies of scale.

Implicit Costs

The opportunity costs that arise from using resources that a business already owns rather than earning revenue from those resources elsewhere.

Explicit Costs

Direct, out-of-pocket expenses incurred in conducting a business activity, such as wages, rent, and materials.