Between 1972 and 1981, Texaco sold gasoline to independent Texaco retailersat “retail tank wagon prices” but granted substantial discounts to distributorsGull and Dompier. Gull resold the gas under its own name. Dompier resoldthe gas under the Texaco brand name to retail stations and entered the retailmarket directly. Since neither Gull nor Dompier had significant storage facili-ties, both distributors picked up gas directly from the Texaco plant and deliv-ered it to their retail outlets. As a result, the sales volume increasedsubstantially at the retail stations purchasing gas from these distributors, whileindependent Texaco retailers suffered a corresponding sales decline. In 1976,independent Texaco retailers filed suit against Texaco. In 1990, the SupremeCourt of the United States found that Texaco had indeed violated antitrust law.Which law do you think Texaco was found guilty of violating?13. Social Dynamo Corporation earned profits last year of $49 million on salesof $500 million. During the same period, its major competitor—EIOCorp.—enjoyed sales of $490 million and earned profits of $52 million.Currently, Social Dynamo is negotiating a deal in which it would acquire theassets of EIO in a transaction Wall Street values at $120 million. A successfulmerger between the two companies is expected to raise prices in the market542Managerial Economics and Business Strategy14.15.16.17.18.by 2 percent. Is Social Dynamo obligated to notify the U.S. Justice Depart-ment and the Federal Trade Commission of its merger intentions? Explain.A well-known conglomerate that manufactures a multitude of noncompetingconsumer products instituted a corporatewide initiative to encourage themanagers of its many divisions to share consumer demographic information.However, since the initiative was implemented, the CEO has noticed that lessinformation is available than ever. Why do you think the CEO’s plan backfired?