Chapter 27

Question 1

what are antitrust laws

Answer 1

enacted to protect competition for the benefit of consumers to keep prices down and keep quality up

current arguement - they have not been enforced - led to corporation and domination of market - affects pricing and supply chain

Question 2

how are antirtrust laws enforced

Answer 2

1) US Department of Justice
2) FTC
3) private actions can sue for damages and attorney fees

Question 3

sherman act section 1

Answer 3

prohibits price fixing (when competitors agree on the prices of products

• price fixing is a “per se” violation (this is an automatic violation)

Question 4

sherman act section 2

Answer 4

prohibits predatory pricing occurs when a co. lowers its prices below cost to drive competitors out of business and then once the competitor is eliminated, they raise prices to recoup the loss

prohibits monopolies (obtained the dominate market power, not because p/s is superior to others –> by surpressing competition with anticompetitive conduct

Question 5

clayton act

Answer 5

prohibits mergers that are anticompetitive –> forbidden if it substantially lessens competition

FTC or US Dept of Justice must approve mergers

Question 6

section 3 of the clayton act

Answer 6

typically tied product may be less desireable one that the buyer might not purchase unless required to do so or may prefer to get from a diff seller