If Penn Hills Mfg

question 165

Multiple Choice

If Penn Hills Mfg. Corp. gives the Johnstown Distributing Co. the exclusive right to distribute Penn Hills' products in Ohio-with the understanding that Johnstown can't sell Penn Hills' products outside Ohio or to other wholesalers in Ohio, this arrangement:

• A) WOULD DEFINITELY BE ILLEGAL because the courts have ruled that all vertical arrangements between producers and intermediaries are illegal.
• B) MAY OR MAY NOT BE LEGAL-the courts would weigh the possible good effects of this vertical arrangement against possible restrictions on competition.
• C) WOULD DEFINITELY BE LEGAL because the courts have ruled that all vertical arrangements between producers and intermediaries are legal.
• D) WOULD DEFINITELY BE ILLEGAL because the courts have ruled that all horizontal arrangements between competitors are illegal.
• E) WOULD DEFINITELY BE LEGAL because the courts have ruled that all horizontal arrangements between competitors are legal.

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Definitions:

Nominal Damages

A small amount of money awarded by a court to recognize that a legal wrong has occurred, but no substantial harm was done.

Compensatory Damages

Monetary compensation awarded to a plaintiff to offset losses or injuries that have occurred as a result of the defendant's actions.

Reliance Damages

Compensation awarded for losses suffered due to reasonable reliance on a promise or agreement that was later breached.

Breached Contract

An occurrence when one or more parties involved in a contractual agreement fails to fulfill their obligation as outlined in the contract.