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Chapter 11: Q. 12 (page 272)

What is the goal of antitrust policies?

Short Answer

Expert verified

To regulate the markets in an economy, the government employs a variety of antitrust measures.

Step by step solution

01

Definition

Antitrust laws allow the government to prohibit certain types of mergers and to break up giant corporations into smaller parts.

02

Explanation

Goals of Antitrust Policies:

  • To encourage market enterprises to compete in a free and fair manner.
  • To avoid a monopoly that concentrates all market power in the hands of a single manufacturer.
  • To make price discrimination illegal by providing reduced costs to consumers.
  • To protect customers by providing them with more options and higher-quality products.
  • To maximize market allocative efficiency.

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Most popular questions from this chapter

Do you think it is possible for the government to

outlaw everything that businesses could do wrong? If so, why does the government not do that? If not, how can regulation stay ahead of rogue businesses that push the limits of the system until it breaks?

If you were developing a product (like a web

browser) for a market with significant barriers to entry, how would you try to get your product into the market successfully?

Why are urban areas willing to subsidize urban

transit systems? Does the argument for subsidies make sense to you?

Why would a firm choose to use one or more of the anticompetitive practices described in Regulating Anticompetitive Behavior?

If public utilities are a natural monopoly, what would be the danger in splitting them into a number of separate competing firms?
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