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Chapter 11: Q. 12 (page 272)

What is the goal of antitrust policies?

Short Answer

Expert verified

To promote competition.

Step by step solution

Step1. Concept

Antitrust laws and regulations are passed generally in the monopoly form of market structure.

Step2. Explanation

Antitrust policies and laws aim at legally reducing the inefficiencies of the monopoly structure. Eg. Clayton Act, 1914. The goal of antitrust laws is to curb monopoly power, promote free market competition and hence look into the welfare of consumers.

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Most popular questions from this chapter

How do we measure a four-firm concentration

ratio? What does a high measure mean about the extent of competition?

What is a minimum resale price maintenance agreement? How might it reduce competition and when might it be acceptable?

What is a tie-in sale? How might it reduce competition and when might it be acceptable?

From the graph you drew to answer Exercise 11.6, would you say this transit system is a natural monopoly? Justify.

Is it true that the four-firm concentration ratio puts more emphasis on one or two very large firms, while the Herfindahl-Hirshman Index puts more emphasis on all the firms in the entire market? Explain briefly.

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