Business law 3301-chapter 27 Test
Questions All Answered Correct 2025-
2026 Updated.
Was the state intermediate appellate court in California in agreement with the lower court's
decision?
a. No
b. Yes - Answer a. No
Assume that Tinder had to use a separate, more costly computer program when it offered
premium services to those users over age thirty compared to the program that it used for those
under age thirty. Would Tinder have been able to argue in support of its differential pricing
scheme more successfully? Why or why not?
a. Perhaps, because differential pricing based on differential costs is often legal and called price
differentiation.
b. Yes, because federal law rather than state law would have governed in this particular unfair
competition statute.
c. No, because all types of price differentials based on age are illegal under federal law. - Answer
a. Perhaps, because differential pricing based on differential costs is often legal and called price
differentiation.
CyberApp, LLC, has been selling its cybersecurity app at $9.95 for a year. A major competitor
comes out with a similar app that it sells for $6.99. CyberApp starts losing business, so it lowers
its price to $6.50. A group of previous CyberApp purchasers file a lawsuit in federal court
claiming that CyberApp is price discriminating in favor of new customers rather than old
customers. They demand to be refunded the difference in the price. Will they prevail in their
lawsuit?
a. Probably, because federal law prohibits all forms of price discrimination (as do all states'
laws).
b. Probably not, because one of the defenses to alleged price discrimination is changing market
conditions.
c. Probably not, because those filing the lawsuit should have filed it in fifty different state courts.
- Answer b. Probably not, because one of the defenses to alleged price discrimination is
changing market conditions.
Frequent users of Amazon often find that goods offered by the company are sometimes higher
priced than the same goods sold on alternative e-commerce websites. Moreover, users of
, b. If Amazon's underlying computer programs can distinguish between customers who are not
sensitive to prices and customers who are more sensitive, then Amazon can price discriminate
and make higher profits.
c. If Amazon can effectively price discriminate, it can thereby discourage less wealthy customers
from using its e-commerce site and hence earn higher profits. - Answer b. If Amazon's
underlying computer programs can distinguish between customers who are not sensitive to
prices and customers who are more sensitive, then Amazon can price discriminate and make
higher profits.
Kibble Bites and Chow Hound, two makers of dog food, agree that Kibble Bites will sell its lamb
and rice dog food in New Jersey but not in Delaware, and Chow Hound will sell its lamb and rice
dog food in Delaware but not in New Jersey. Their agreement is a:
a. vertical agreement.
b. horizontal market division.
c. refusal to deal.
d. resale price maintenance agreement. - Answer b. horizontal market division.
Taco Heaven, Burrito Joint, and Fast Fajitas are competitors in the Boston area. They have a
secret agreement not to purchase any beef from Northwest Beef Growers' Cooperative. Their
agreement is:
a. a horizontal market division.
b. a group boycott.
c. price discrimination.
d. a tying arrangement. - Answer b. a group boycott.
In a well-established market, ComBuilt produces the nation's best-selling bookkeeping software.
The program is far superior to all other similar programs. ComBuilt requires all its distributors
and retailers to sell the program at a specified price. This is:
a. known as a price maintenance agreement and may violate Section 1 of the Sherman Act
under the rule of reason test.
b. allowed by antitrust laws because it is a superior product.
c. exempt from antitrust laws because it does not constitute an interference with competition.
d. known as a price maintenance agreement and is a per se violation of Section 1 of the
Sherman Act. - Answer a. known as a price maintenance agreement and may violate Section
1 of the Sherman Act under the rule of reason test.
Questions All Answered Correct 2025-
2026 Updated.
Was the state intermediate appellate court in California in agreement with the lower court's
decision?
a. No
b. Yes - Answer a. No
Assume that Tinder had to use a separate, more costly computer program when it offered
premium services to those users over age thirty compared to the program that it used for those
under age thirty. Would Tinder have been able to argue in support of its differential pricing
scheme more successfully? Why or why not?
a. Perhaps, because differential pricing based on differential costs is often legal and called price
differentiation.
b. Yes, because federal law rather than state law would have governed in this particular unfair
competition statute.
c. No, because all types of price differentials based on age are illegal under federal law. - Answer
a. Perhaps, because differential pricing based on differential costs is often legal and called price
differentiation.
CyberApp, LLC, has been selling its cybersecurity app at $9.95 for a year. A major competitor
comes out with a similar app that it sells for $6.99. CyberApp starts losing business, so it lowers
its price to $6.50. A group of previous CyberApp purchasers file a lawsuit in federal court
claiming that CyberApp is price discriminating in favor of new customers rather than old
customers. They demand to be refunded the difference in the price. Will they prevail in their
lawsuit?
a. Probably, because federal law prohibits all forms of price discrimination (as do all states'
laws).
b. Probably not, because one of the defenses to alleged price discrimination is changing market
conditions.
c. Probably not, because those filing the lawsuit should have filed it in fifty different state courts.
- Answer b. Probably not, because one of the defenses to alleged price discrimination is
changing market conditions.
Frequent users of Amazon often find that goods offered by the company are sometimes higher
priced than the same goods sold on alternative e-commerce websites. Moreover, users of
, b. If Amazon's underlying computer programs can distinguish between customers who are not
sensitive to prices and customers who are more sensitive, then Amazon can price discriminate
and make higher profits.
c. If Amazon can effectively price discriminate, it can thereby discourage less wealthy customers
from using its e-commerce site and hence earn higher profits. - Answer b. If Amazon's
underlying computer programs can distinguish between customers who are not sensitive to
prices and customers who are more sensitive, then Amazon can price discriminate and make
higher profits.
Kibble Bites and Chow Hound, two makers of dog food, agree that Kibble Bites will sell its lamb
and rice dog food in New Jersey but not in Delaware, and Chow Hound will sell its lamb and rice
dog food in Delaware but not in New Jersey. Their agreement is a:
a. vertical agreement.
b. horizontal market division.
c. refusal to deal.
d. resale price maintenance agreement. - Answer b. horizontal market division.
Taco Heaven, Burrito Joint, and Fast Fajitas are competitors in the Boston area. They have a
secret agreement not to purchase any beef from Northwest Beef Growers' Cooperative. Their
agreement is:
a. a horizontal market division.
b. a group boycott.
c. price discrimination.
d. a tying arrangement. - Answer b. a group boycott.
In a well-established market, ComBuilt produces the nation's best-selling bookkeeping software.
The program is far superior to all other similar programs. ComBuilt requires all its distributors
and retailers to sell the program at a specified price. This is:
a. known as a price maintenance agreement and may violate Section 1 of the Sherman Act
under the rule of reason test.
b. allowed by antitrust laws because it is a superior product.
c. exempt from antitrust laws because it does not constitute an interference with competition.
d. known as a price maintenance agreement and is a per se violation of Section 1 of the
Sherman Act. - Answer a. known as a price maintenance agreement and may violate Section
1 of the Sherman Act under the rule of reason test.
