EBK ECONOMICS: PRINCIPLES AND POLICY
13th Edition
ISBN: 8220100605932
Author: Blinder
Publisher: Cengage Learning US
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Question
Chapter 13, Problem 12DQ
To determine
Some legal rules that discourage the usage of antitrust laws to prevent competition.
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Some countries’ competition and antitrust policies are pro-competition and pro-consumer, whereas other countries’ policies are pro-incumbent and pro-producer. How do they differ?
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U.S. antitrust laws are designed to prohibit monopolization and encourage competition. Why, then, does the government erect barriers to entry and create monopoly power by granting firms patents?
Chapter 13 Solutions
EBK ECONOMICS: PRINCIPLES AND POLICY
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- Unsure which is the correct answer The Clayton Act of 1914 classifies several business practices as illegal, including price discrimination and tying contracts, if they "substantially lessen competition or tend to create a monopoly." The Clayton Act of 1914 is an example of which of the following? Price regulations or antitrust lawsarrow_forwardIf patents, copyrights, and trademarks reduce competition, why does the federal government grant them? What is a natural monopoly? Give two examples locally.arrow_forwardAs a result of globalization and new information and communications technology, would you expect that the definitions of markets that antitrust authorities use will become broader or narrower?arrow_forward
- A patent effectively allows a firm to operate as a monopoly while the patent is in effect. Some people argue that the market power created by patents harms consumers and shouldn't be granted. Others argue that patents are needed to encourage research and innovation. You can read the article from Forbes to learn more about the history and policy surrounding patents. Classify the arguments below as either arguments for patents or arguments against patents. Arguments For Patents Arguments Against Patents Answer Bank prevents free-riding encourages higher prices for consumers prevents competition in the market research results in a positive externality for society leads to an ineffient level of productionarrow_forwardWhich of the following is true of antitrust laws in the United States? Group of answer choices Economists unanimously agree on the usefulness of antitrust action to increase the competitiveness of industries. They were embedded in the U.S. Constitution but mostly eliminated in the early 1900s. The Sherman Act in 1980 eliminated and repealed all existing U.S. anti-trust laws. Historically they have been abused by some competitors going after other competitors in ways that are detrimental to consumers.arrow_forwardWhat do you understand by discriminatory monopoly? Bring out the conditions that enables the monopoly firm to charge different prices for its product in different markets.arrow_forward
- Antitrust laws are designed to…. A. Encourage monopolies B. Ensure the safety of food and beverages that people consume C. Allow for monopoly to gain complete control of a market D. Regulate monopoliesarrow_forwardAnswer the given question with a proper explanation and step-by-step solution. Why is it important for the United States to have laws such as the Sherman Antitrust Act and the Clayton Antitrust Act? Can you describe corporations today that are taking such a large part of market share that it's difficult for smaller companies to enter the market?arrow_forwardIn contrast to the Sherman Act, the Clayton Act of 1914 a. was more general, outlawing monopoly or attempting to acquire a monopolyb. identified specific practices that were illegalc. made interlocking directorates legal as long as they were reasonabled. invalidated the concept of "illegal per se"e. made cartels legal English Common law became the basis for American Common Law. What does the Common Law say about damages for parties injured by restraint of trade? a. They are not permittedb. Damages can be awarded in full to injured partiesc. Triple damages are awarded to injured partiesd. Only a fraction of damages will be awarded due to statutory restrictionse. The government could sue for damages on behalf of injured parties, and then give them damages net of taxes Some capital equipment such as a moving assembly line only comes in one size. This usually tends to create a. a significant diseconomy of scale at the plant level b. a significant diseconomy of scale at the firm level c.…arrow_forward
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