Humongous Corp

question 82

Multiple Choice

Humongous Corp. ,a conglomerate with interests in various industries,recently acquired Perfect Petrochemicals Co. ,a prominent producer of petroleum products that are used in manufacturing plastic.This acquisition was a complete surprise to Perfect's competitors,who never thought that Humongous had any desire to become involved in the petrochemical production business.Companies A and B,owned by Humongous,used plastic as a raw material.None of the companies under the Humongous umbrella made plastic,therefore A and B bought plastic from outside suppliers who used petrochemical products as raw material to make plastic.Which of the following theories is the most appropriate one for challenging the acquisition of Perfect by Humongous under Section 7 of the Clayton Act?

• A)Elimination of actual potential competition
• B)Potential reciprocity
• C)Unfair advantage
• D)Elimination of perceived potential competition

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Definitions:

Profit Opportunities

Situations where businesses can earn additional profits due to market conditions, innovations, or identifying unmet needs.

Laissez-faire Market

An economic model where exchanges between individuals or businesses are not subject to governmental regulations, preferential treatments, duties, or financial support.

Economics

The social science that studies the production, distribution, and consumption of goods and services.

Sociology

The study of social behavior, society, patterns of social relationships, social interaction, and culture that surrounds everyday life.