Question

Which of the following activities are prohibited by the Clayton Act when they lead to less competition? Each of these answers is correct. A firm acquires a major percentage of the stocks of a competing firm. A director from one business sits on the board of a competing firm. A buyer is forced to buy multiple products from a producer in order to get a desired product.

Answer 1

Answer: All of the Above

Explanation:

The Clayton Act of 1914 was passed to curb unfair business practices as well as to protect the rights of labour.

Some practices that were prohibited when they led to less competition include,

- A firm acquiring a major percentage of the stocks of a competing firm because this could signify an amalgamation of efforts on the part of both firms and they could therefore have some control over Pricing.

-A director from one business sitting on the board of a competing firm because this could lead to cooperating or Corperate espionage.

- A buyer is forced to buy multiple products from a producer in order to get a desired product is expressly forbidden.