Version A

I. Multiple Choice

(1)b. (2)b. (3)d. (4)b. (5)b. (6)d. (7)b. (8)d. (9)a. (10)d. (11)a. (12)a.

II. Problems

(1) [Cases: 20 pts]

1. MCI v. AT&T (1982).
2. Utah Pie v. Continental Baking (1967).
3. Berkey Photo v. Kodak (1979).
4. Standard Oil v. U.S. (1911).
5. U.S. v. U.S. Steel (1920).

(2) [Monopoly price discrimination: 8 pts]

1. $120.
2. $22.

(3) [Predatory pricing: 44 pts]

1. $5.
2. $180.
3. $6.
4. $320.
5. $250.
6. no.
7. $40.
8. 60.
9. 60.
10. $180.
11. By producing 60 units in Market A, Firm 1 avoids revealing its high cost to Firm 2. So in Market B, Firm 2 stays out, allowing Firm 1 to enjoy monopoly profit.

II. Critical Thinking

The answer to this question is not clear-cut without more information about the market for smart phones. If the Apple iPhone is truly unique and has large market share, then software companies would not be able to duplicate it, and so it might be considered an "essential facility" in the antitrust sense. If so, then Apple must provide access to competitors by giving sufficient technical information for them to write software for the iPhone. If the Apple iPhone is not truly unique and has small market share, then software companies can succede without writing software for the iPhone, and it would not be considered an "essential facility" in the antitrust sense.

Version B

I. Multiple Choice

(1)d. (2)a. (3)b. (4)c. (5)d. (6)d. (7)d. (8)a. (9)b. (10)c. (11)c. (12)c.

II. Problems

(1) [Cases: 20 pts]

1. Standard Oil v. U.S. (1911).
2. U.S. v. U.S. Steel (1920).
3. MCI v. AT&T (1982).
4. Utah Pie v. Continental Baking (1967).
5. Berkey Photo v. Kodak (1979).

(2) [Monopoly price discrimination: 8 pts]

1. $70.
2. $24.

(3) [Predatory pricing: 44 pts]

1. $9.
2. $360.
3. $11.
4. $640.
5. $500.
6. no.
7. $80.
8. 60.
9. 60.
10. $360.
11. By producing 60 units in Market A, Firm 1 avoids revealing its high cost to Firm 2. So in Market B, Firm 2 stays out, allowing Firm 1 to enjoy monopoly profit.

II. Critical Thinking

Same as Version A.

[end of answer key]