Tie-In Contracts

question 8

Multiple Choice

Tie-in contracts:

• A) do not violate Section 3 of the Clayton Act regardless of the seller having monopoly power in the tie-in product.
• B) do not violate Section 1 of the Sherman Act under any circumstance.
• C) violate Section 3 of the Clayton Act if the seller has foreclosed competitors from a substantial volume of commerce in the tied product.
• D) violate Section 7 of the Clayton Act if they violate Section 1 of the Sherman Act.

---

Definitions:

Margin Of Safety

The difference between actual sales and break-even sales, indicating how much sales can fall before a business incurs a loss.

Break-Even Sales

The amount of revenue required to cover both the fixed and variable costs of production.

Actual Sales

The exact amount of sales revenue that a company has generated over a specific period, as opposed to projected or forecasted sales.

High-Low Method

A technique used in cost accounting to estimate fixed and variable costs based on the highest and lowest levels of activity.