📚 Learning Guide
Sherman Antitrust Act Application
hard

Which of the following actions exemplify the application of the Sherman Antitrust Act in regulating monopolies? Select all that apply.

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Choose the Best Answer

A

Breaking up the Northern Securities railroad trust

B

Allowing large corporations to merge without oversight

C

Challenging Standard Oil's market dominance

D

Enabling the creation of monopolies in the technology sector

E

Prosecuting companies for price-fixing agreements

Understanding the Answer

Let's break down why this is correct

Answer

The Sherman Act targets conduct that harms competition, such as when a firm colludes with rivals to fix prices or shares markets, which is illegal and can lead to court orders or fines. It also prohibits a single company from monopolizing an industry by using unfair tactics—like buying out competitors or controlling essential resources—to eliminate rivals. Another example is a merger that would substantially lessen competition, which regulators can block or require divestitures. Finally, tying arrangements, where a firm forces customers to buy an unrelated product to obtain a desired one, are also scrutinized under the Act. These actions show how the Sherman Act is applied to prevent monopolistic behavior.

Detailed Explanation

The Act was used to break up the Northern Securities railroad trust, stop Standard Oil from controlling the market, and punish companies that set prices together. Other options are incorrect because The law does not let big firms merge freely; it checks them; The law is meant to stop monopolies, not help them.

Key Concepts

Sherman Antitrust Act
Monopolies and Trusts
Interstate Commerce
Topic

Sherman Antitrust Act Application

Difficulty

hard level question

Cognitive Level

understand

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