Question

If a dominant firm is charged with refusal to deal under antitrust​ law, it is being charged because A. the firm will not set its price at the regulated rate. B. it is refusing to cooperate with antitrust​ authorities, such as the Department of Justice. C. it will sell its products only to people who agree to buy only from it and not from rival firms. D. it is refusing to sell a key input to downstream​ rivals, thereby reducing or destroying competition.

Answer 1

Answer:

C. it will sell its products only to people who agree to buy only from it and not from rival firms.

Explanation:

Generally, any business can choose its business partners. But, under certain circumstances, there are limits on this freedom for a firm with a big market power.

There is an attempting to define those limited situations when this kinds of firm may violate antitrust law:

- The first option is that it violate the antitrust law by refusing to do business with other firms, or do business but under certain requisites. The key here is how the refusal to deal helps the monopolist maintain its empire, or allows the monopolist make an strategy where its monopoly is use in another market to attempt to monopolize other market.

- They can also refuse to deal with customers or suppliers, what cause the effect of preventing them from dealing with a rival: "If you deal with my competitor, I refuse to deal with you."

- Also, regarding to a firm dealing with its competitors,  if the monopolist refuses to sell a product or service to a competitor and it makes it available to others, or if the monopolist has done business with the competitor and then stops, then the monopolist needs a legitimate business reason for its actions.