The government can regulate not just businesses, but also...

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Chapter 5—GOVERNMENT REGULATION OF COMPETITION AND PRICES TRUE/FALSE The government can regulate not just businesses, but also business competition and prices. T MSC: AACSB Analytic The government may regulate production but not prices. ANS: F MSC: AACSB Analytic The Clayton Act prohibits price discrimination between different buyers of like commodities when the effect may be to substantially lessen competition.
State governments may regulate business in all of its aspects, even if such regulation imposes a burden on interstate commerce. ANS: F MSC: AACSB Analytic The federal government may regulate any area of business to advance the nation’s economic needs. T MSC: AACSB Analytic ANS: T MSC: AACSB Analytic A manufacturer with distributors in New York City may give its newer distributors free advertising and other services to help them compete with the distributors who have been doing business for a number of years and have become firmly established. ANS: F MSC: AACSB Analytic A state may prohibit a seller from selling below cost if the purpose is to harm competitors.
The government may prohibit false advertising and labeling, but may not establish standards for ordinary things like cosmetics because they pose no danger to the public. ANS: F MSC: AACSB Analytic The federal government may regulate all methods of intrastate transportation and communication. ANS: F MSC: AACSB Analytic The government may require licenses to be able to deal in certain goods, and these licenses may be revoked for improper conduct or violations of statutes and regulations. ANS: T MSC: AACSB Analytic Governments may own factories and may compete with privately-owned businesses. ANS: T MSC: AACSB Analytic Each of the states and the federal government have statutes and regulations that prohibit unfair methods of competition. ANS: T MSC: AACSB Analytic The Federal Trade Commission administers the law prohibiting unfair methods of competition. ANS: T MSC: AACSB Analytic The Federal Trade Commission has taken enforcement steps against refusals to sell, boycotts, market restrictions, disparagement of competitors’ products, and unlawful methods of billing and collection. ANS: T MSC: AACSB Analytic ANS: T MSC: AACSB Analytic A price reduction to one customer is lawful when it is made because of the deteriorated condition of the goods sold to that customer. ANS: T MSC: AACSB Analytic The Robinson-Patman Act of 1936 guarantees a seller the right to refuse to deal with anyone for any reason or purpose. ANS: F MSC: AACSB Analytic It is a federal offense for a manufacturer to require a distributor to maintain a specified price on reselling to retailers. ANS: T MSC:

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