The Alcoa case of 1945 was the first case where the Supreme Court applied the per se rule to find a violation of the Sherman Act based solely on the existence of monopoly power, without evidence of predatory behavior.
73
12. Which of the following is an example of
a vertical merger?
a. A merger between two automobile
manufacturers.
b. A merger between an automobile
manufacturer and a tire manufacturer.
c. A merger between an automobile
manufacturer and a computer software firm.
d. A merger between two tire manufacturers.
B. A vertical merger is between firms at different stages of production, such as a manufacturer and its supplier. Option B is the only example of a vertical merger.
Vicarious liability of state and sovereign immunityReshma Suresh
This document discusses the vicarious liability of governments in India for torts committed by government employees. It begins by explaining the historical concept of sovereign immunity in England, whereby the government could not be sued for torts of its employees. This changed with the Crown Proceedings Act of 1947. In India as well, various acts allowed governments to be sued by naming them as bodies. The document then examines Indian case law both before and after the constitution, distinguishing between torts committed in sovereign functions like policing versus non-sovereign functions. It concludes by noting the Supreme Court has suggested guidelines but parliament has yet to codify them fully.
Casus omissus, interpretation of statutespoonamraj2010
The document discusses the legal concept of "casus omissus" which refers to a situation not provided for in the language of a statute. It notes that courts cannot supply omissions or legislate, they can only interpret the law. It provides examples from case law where courts have both refused to supply omissions due to clear legislative intent, and in other cases have supplied omitted words to avoid making a statute null. The document outlines principles from cases related to supplying omissions and harmonious construction of statutes.
The document provides information on various legal concepts related to interpretation of statutes. It defines key terms like statute, interpretation, construction and ordinance. It also explains the difference between interpretation and construction. Furthermore, it outlines different rules of interpretation like literal rule, mischief rule, ejusdem generis rule etc. Finally, it discusses various aids that can be used for interpretation like long title, preamble, definitions, marginal notes etc.
The document summarizes the key concepts of the historical school of jurisprudence. It discusses that historical jurists like Montesquieu, Savigny, and Maine believed that law develops organically over time based on the customs and traditions of the people, rather than being created through legislation or judicial decisions. Savigny's concept of "Volksgeist" described law as emerging from the shared spirit or values of the national community. The historical school rejected theories of natural law and viewed law as continually evolving according to the changing needs and norms of society.
The document discusses the concept of discretion in administrative law. It defines discretionary powers as those that allow administrative bodies to apply principles and criteria based on the specific facts and circumstances of individual cases, rather than applying rules uniformly. It notes that discretion is necessary for the smooth functioning of administration and doing justice, but can also lead to arbitrariness if not constrained. The document outlines various views on discretion and how it can be abused, as well as how courts have ruled on challenges to the exercise of discretionary powers under Articles 14, 19, and 21 of the Indian Constitution.
This document discusses police deviance and corruption. It defines police deviance as any activities inconsistent with norms or ethics, including two main types: occupational deviance involving criminal/noncriminal acts during work, and abuse of authority violating the public's trust. The document then lists examples of police duties and various forms of police misconduct like corruption, brutality, lying, theft, and substance abuse. It provides details on types of police misconduct such as false arrests, fake evidence, leaking confidential information, and perjury. Finally, it discusses causes of police deviance and the need for police administrators to set clear expectations, develop an ethical culture, and hold officers and supervisors accountable.
This document provides an introduction to the interpretation of statutes. It discusses that interpretation involves ascertaining the true meaning of words used in a statute. Various principles and aids to interpretation have evolved over time to help determine legislative intent. Latin language and phrases are also important in statutory construction. The document outlines different classifications of statutes and principles of interpretation such as presumptions, rules, and internal and external aids that help guide the interpretation process.
The document discusses different types of mistake in contracts, including common mistake, unilateral mistake, and mistake as to identity. For common mistake, a contract may be void if there is a mistaken belief about a fundamental fact like the existence or quality of the subject matter. For unilateral mistake, the contract may be void if one party is aware of the other's mistake regarding a term. Mistake as to identity looks at whether parties intended to contract with each other or someone else. The remedies are different depending on whether the mistake renders the contract void at law or voidable in equity.
Vicarious liability of state and sovereign immunityReshma Suresh
This document discusses the vicarious liability of governments in India for torts committed by government employees. It begins by explaining the historical concept of sovereign immunity in England, whereby the government could not be sued for torts of its employees. This changed with the Crown Proceedings Act of 1947. In India as well, various acts allowed governments to be sued by naming them as bodies. The document then examines Indian case law both before and after the constitution, distinguishing between torts committed in sovereign functions like policing versus non-sovereign functions. It concludes by noting the Supreme Court has suggested guidelines but parliament has yet to codify them fully.
Casus omissus, interpretation of statutespoonamraj2010
The document discusses the legal concept of "casus omissus" which refers to a situation not provided for in the language of a statute. It notes that courts cannot supply omissions or legislate, they can only interpret the law. It provides examples from case law where courts have both refused to supply omissions due to clear legislative intent, and in other cases have supplied omitted words to avoid making a statute null. The document outlines principles from cases related to supplying omissions and harmonious construction of statutes.
The document provides information on various legal concepts related to interpretation of statutes. It defines key terms like statute, interpretation, construction and ordinance. It also explains the difference between interpretation and construction. Furthermore, it outlines different rules of interpretation like literal rule, mischief rule, ejusdem generis rule etc. Finally, it discusses various aids that can be used for interpretation like long title, preamble, definitions, marginal notes etc.
The document summarizes the key concepts of the historical school of jurisprudence. It discusses that historical jurists like Montesquieu, Savigny, and Maine believed that law develops organically over time based on the customs and traditions of the people, rather than being created through legislation or judicial decisions. Savigny's concept of "Volksgeist" described law as emerging from the shared spirit or values of the national community. The historical school rejected theories of natural law and viewed law as continually evolving according to the changing needs and norms of society.
The document discusses the concept of discretion in administrative law. It defines discretionary powers as those that allow administrative bodies to apply principles and criteria based on the specific facts and circumstances of individual cases, rather than applying rules uniformly. It notes that discretion is necessary for the smooth functioning of administration and doing justice, but can also lead to arbitrariness if not constrained. The document outlines various views on discretion and how it can be abused, as well as how courts have ruled on challenges to the exercise of discretionary powers under Articles 14, 19, and 21 of the Indian Constitution.
This document discusses police deviance and corruption. It defines police deviance as any activities inconsistent with norms or ethics, including two main types: occupational deviance involving criminal/noncriminal acts during work, and abuse of authority violating the public's trust. The document then lists examples of police duties and various forms of police misconduct like corruption, brutality, lying, theft, and substance abuse. It provides details on types of police misconduct such as false arrests, fake evidence, leaking confidential information, and perjury. Finally, it discusses causes of police deviance and the need for police administrators to set clear expectations, develop an ethical culture, and hold officers and supervisors accountable.
This document provides an introduction to the interpretation of statutes. It discusses that interpretation involves ascertaining the true meaning of words used in a statute. Various principles and aids to interpretation have evolved over time to help determine legislative intent. Latin language and phrases are also important in statutory construction. The document outlines different classifications of statutes and principles of interpretation such as presumptions, rules, and internal and external aids that help guide the interpretation process.
The document discusses different types of mistake in contracts, including common mistake, unilateral mistake, and mistake as to identity. For common mistake, a contract may be void if there is a mistaken belief about a fundamental fact like the existence or quality of the subject matter. For unilateral mistake, the contract may be void if one party is aware of the other's mistake regarding a term. Mistake as to identity looks at whether parties intended to contract with each other or someone else. The remedies are different depending on whether the mistake renders the contract void at law or voidable in equity.
This presentation is an attempt to explain the colourable legislation in a simple language with the limitations on it and supported by the landmark cases delivered by the apex court.
The document discusses the differences between mandatory and directory provisions in statutes. Mandatory provisions must be strictly followed and non-performance can result in sanctions, while directory provisions are discretionary and non-performance does not result in sanctions. Whether a provision is mandatory or directory depends on the language used and legislative intent gathered from the context and purpose. Key factors include whether a time limit is specified, if public or private duties are involved, and if the consequences of non-compliance undermine the statute's objectives. There are no absolute rules and each case must be evaluated based on its specific circumstances.
United nations guidelines for consumer protectionRITA KAKADE
This document outlines the United Nations Guidelines for Consumer Protection. It discusses 8 areas that governments should focus on to protect consumers: physical safety, economic interests, quality standards, access to essential goods and services, redress measures, education programs, sustainable consumption, and specific areas like food and water. Some key points covered are promoting high ethical standards for businesses, independent consumer groups, sustainable practices, and measures against misleading claims. The goal overall is to empower consumers and maintain adequate consumer protections.
This document discusses the concept of judicial review in India. It defines judicial review as the power of courts to review laws enacted by the legislature and declare them unconstitutional. It outlines that judicial review originated in the US and was later incorporated into the Indian constitution. The document discusses important cases where judicial review was exercised in India and explains that the power helps maintain the balance of federalism and protect fundamental rights. It also lists the relevant constitutional provisions and scope of judicial review in India.
The document discusses the rule of law in India. It defines the rule of law and outlines A.V. Dicey's three postulates: supremacy of law, equality before the law, and predominance of legal spirit. It examines how the rule of law is reflected in the Indian constitution through fundamental rights, judicial independence, and judicial review. Several Supreme Court cases have upheld the rule of law as a basic feature of the constitution. In conclusion, while not expressly mentioned, the rule of law governs India as a fundamental principle of constitutional governance.
Alternative dispute resolution (ADR) describes ways for parties to settle civil disputes without formal court hearings, using arbitration, mediation, or conciliation with an independent third party. Common types of ADR include arbitration, where a specialist decides the dispute, and mediation, where an independent mediator helps facilitate settlement discussions between the parties. The Civil Procedure Rules encourage parties to attempt ADR before full litigation and courts can impose costs penalties if parties unreasonably refuse ADR offers.
The Bar Council of India regulates and represents the Indian bar. It was established under the Advocates Act of 1961 to prescribe standards for professional conduct and ethics, and exercises disciplinary control over lawyers. The BCI has committees that oversee legal education, discipline, and executive functions. Some issues facing the profession include fabrication of evidence, violating ethics, and settling cases for money. The BCI works to combat deviance through its Disciplinary Committee, which has powers like a civil court to summon people, require documents, and issue commissions to examine witnesses. It can punish lawyers for misconduct under the Advocates Act. Reforming legal education and making the system more client-friendly could help improve the image of lawyers.
The document outlines the presentation given by Kalpeshkumar L. Gupta on the Competition Commission of India (CCI). It provides definitions of key terms related to competition law like cartel and discusses provisions of the Competition Act of 2002 regarding anti-competitive agreements, abuse of dominant position, and combinations. It also summarizes the regulatory framework around combinations and filing requirements to notify CCI of proposed mergers, acquisitions and other deals.
The document discusses the rule of strict liability established by Rylands v Fletcher and its exceptions. The Rylands v Fletcher case established that a person is strictly liable for damages caused by anything dangerous they bring onto their land that escapes and causes harm, even if they were not negligent. The key exceptions to this rule of strict liability are acts of God, acts of third parties, the plaintiff's own fault, when the act is authorized by statute, and when the plaintiff has consented to the presence of the dangerous thing.
1. The document discusses the concepts of offer and acceptance in contract law.
2. It provides definitions and examples of express and implied offers, as well as general and specific offers.
3. The key requirements for a valid acceptance are discussed, including that it must be absolute, communicated to the offeror, and according to the prescribed mode. Silence generally does not imply acceptance.
Anti competitive agreements under the competition actAltacit Global
The document discusses anti-competitive agreements under the Competition Act in India. It covers what the Act prohibits, including anti-competitive arrangements between businesses like cartels that fix prices or allocate markets. Horizontal agreements between competitors like price fixing are prohibited. Vertical agreements between businesses at different levels can also restrict competition. The Indian Contract Act also addresses restrictive agreements but has exceptions for reasonable restraints like non-compete clauses for outgoing business partners. The Competition Act aims to promote fair competition for consumer welfare while preventing monopolies formed through anti-competitive collusion.
Alternative dispute resolution: Interim MeasuresRittika Dattana
This document provides an overview of interim measures in arbitration proceedings under the Indian Arbitration and Conciliation Act of 1996. It defines interim measures as temporary relief granted pending the final resolution of a dispute. Section 9 of the Act allows parties to approach courts to seek interim measures to preserve assets or evidence. The document discusses the types of interim measures available, including injunctive relief, attachment orders, and appointing receivers. It analyzes the scope of interim measures under Section 9 and their purpose of safeguarding parties from harm due to delays in the arbitration process.
National Webinar at the Centre for Corporate and Competition Law at Symbiosis Law School, Hyderabad on the topic ”Abuse of Dominance in Competition Law” on 27th August, 2021 by Shri Dhanendra Kumar, 1st Chairperson, Competition Commission of India (CCI).
Difference between vested and contingent interestGagan
This document summarizes the key differences between vested interests and contingent interests when transferring property. A vested interest creates ownership for a person without conditions, while a contingent interest only provides a chance of ownership if a specified uncertain event occurs. A vested interest does not depend on fulfilling conditions, whereas a contingent interest solely depends on fulfilling its condition. A vested interest can pass to heirs upon the transferee's death, but a contingent interest may or may not pass to heirs depending on the nature of the contingency.
The document discusses oppression and mismanagement under company law. It defines oppression as any burdensome, harsh or wrongful act according to the dictionary. Lord Cooper defined oppression as conduct that departs from fair dealing and violates shareholders' expectations of fair play. The document outlines the grounds and process for applying for relief from oppression or mismanagement under Sections 397 and 398 of the Indian Companies Act, including required applicants and possible reliefs.
The document discusses the importance of competition and the need for competition laws when global trade is taking place on a single platform. It notes that India enacted the Competition Act 2002 to establish a new competition regime and foster competition in markets after economic reforms in 1991 made the previous MRTP Act inadequate. The Act aims to eliminate anti-competitive practices and promote competition for the benefit of consumers.
Day 1 Intro to CCP and Competition Law in PakistanAhmed Qadir
The document discusses the importance of competition in developing countries and the need for competition laws. It provides background on competition laws in Pakistan, from the original 1970 law to the current 2010 Competition Act. The current law established the Competition Commission of Pakistan and prohibits anti-competitive behaviors such as abuse of dominant market position, cartelization through prohibited agreements, deceptive marketing practices, and mergers or acquisitions that substantially lessen competition. It also stresses the importance of advocacy and increasing awareness of competition laws.
This document provides an overview of Google Scholar's free case law database, including:
- It includes cases from U.S. federal and state courts from 1791 to present.
- Users can search by citation, case name, judge, topic or other criteria and filter results by jurisdiction.
- Search results show how cited information and links to related cases or articles for further research.
This presentation is an attempt to explain the colourable legislation in a simple language with the limitations on it and supported by the landmark cases delivered by the apex court.
The document discusses the differences between mandatory and directory provisions in statutes. Mandatory provisions must be strictly followed and non-performance can result in sanctions, while directory provisions are discretionary and non-performance does not result in sanctions. Whether a provision is mandatory or directory depends on the language used and legislative intent gathered from the context and purpose. Key factors include whether a time limit is specified, if public or private duties are involved, and if the consequences of non-compliance undermine the statute's objectives. There are no absolute rules and each case must be evaluated based on its specific circumstances.
United nations guidelines for consumer protectionRITA KAKADE
This document outlines the United Nations Guidelines for Consumer Protection. It discusses 8 areas that governments should focus on to protect consumers: physical safety, economic interests, quality standards, access to essential goods and services, redress measures, education programs, sustainable consumption, and specific areas like food and water. Some key points covered are promoting high ethical standards for businesses, independent consumer groups, sustainable practices, and measures against misleading claims. The goal overall is to empower consumers and maintain adequate consumer protections.
This document discusses the concept of judicial review in India. It defines judicial review as the power of courts to review laws enacted by the legislature and declare them unconstitutional. It outlines that judicial review originated in the US and was later incorporated into the Indian constitution. The document discusses important cases where judicial review was exercised in India and explains that the power helps maintain the balance of federalism and protect fundamental rights. It also lists the relevant constitutional provisions and scope of judicial review in India.
The document discusses the rule of law in India. It defines the rule of law and outlines A.V. Dicey's three postulates: supremacy of law, equality before the law, and predominance of legal spirit. It examines how the rule of law is reflected in the Indian constitution through fundamental rights, judicial independence, and judicial review. Several Supreme Court cases have upheld the rule of law as a basic feature of the constitution. In conclusion, while not expressly mentioned, the rule of law governs India as a fundamental principle of constitutional governance.
Alternative dispute resolution (ADR) describes ways for parties to settle civil disputes without formal court hearings, using arbitration, mediation, or conciliation with an independent third party. Common types of ADR include arbitration, where a specialist decides the dispute, and mediation, where an independent mediator helps facilitate settlement discussions between the parties. The Civil Procedure Rules encourage parties to attempt ADR before full litigation and courts can impose costs penalties if parties unreasonably refuse ADR offers.
The Bar Council of India regulates and represents the Indian bar. It was established under the Advocates Act of 1961 to prescribe standards for professional conduct and ethics, and exercises disciplinary control over lawyers. The BCI has committees that oversee legal education, discipline, and executive functions. Some issues facing the profession include fabrication of evidence, violating ethics, and settling cases for money. The BCI works to combat deviance through its Disciplinary Committee, which has powers like a civil court to summon people, require documents, and issue commissions to examine witnesses. It can punish lawyers for misconduct under the Advocates Act. Reforming legal education and making the system more client-friendly could help improve the image of lawyers.
The document outlines the presentation given by Kalpeshkumar L. Gupta on the Competition Commission of India (CCI). It provides definitions of key terms related to competition law like cartel and discusses provisions of the Competition Act of 2002 regarding anti-competitive agreements, abuse of dominant position, and combinations. It also summarizes the regulatory framework around combinations and filing requirements to notify CCI of proposed mergers, acquisitions and other deals.
The document discusses the rule of strict liability established by Rylands v Fletcher and its exceptions. The Rylands v Fletcher case established that a person is strictly liable for damages caused by anything dangerous they bring onto their land that escapes and causes harm, even if they were not negligent. The key exceptions to this rule of strict liability are acts of God, acts of third parties, the plaintiff's own fault, when the act is authorized by statute, and when the plaintiff has consented to the presence of the dangerous thing.
1. The document discusses the concepts of offer and acceptance in contract law.
2. It provides definitions and examples of express and implied offers, as well as general and specific offers.
3. The key requirements for a valid acceptance are discussed, including that it must be absolute, communicated to the offeror, and according to the prescribed mode. Silence generally does not imply acceptance.
Anti competitive agreements under the competition actAltacit Global
The document discusses anti-competitive agreements under the Competition Act in India. It covers what the Act prohibits, including anti-competitive arrangements between businesses like cartels that fix prices or allocate markets. Horizontal agreements between competitors like price fixing are prohibited. Vertical agreements between businesses at different levels can also restrict competition. The Indian Contract Act also addresses restrictive agreements but has exceptions for reasonable restraints like non-compete clauses for outgoing business partners. The Competition Act aims to promote fair competition for consumer welfare while preventing monopolies formed through anti-competitive collusion.
Alternative dispute resolution: Interim MeasuresRittika Dattana
This document provides an overview of interim measures in arbitration proceedings under the Indian Arbitration and Conciliation Act of 1996. It defines interim measures as temporary relief granted pending the final resolution of a dispute. Section 9 of the Act allows parties to approach courts to seek interim measures to preserve assets or evidence. The document discusses the types of interim measures available, including injunctive relief, attachment orders, and appointing receivers. It analyzes the scope of interim measures under Section 9 and their purpose of safeguarding parties from harm due to delays in the arbitration process.
National Webinar at the Centre for Corporate and Competition Law at Symbiosis Law School, Hyderabad on the topic ”Abuse of Dominance in Competition Law” on 27th August, 2021 by Shri Dhanendra Kumar, 1st Chairperson, Competition Commission of India (CCI).
Difference between vested and contingent interestGagan
This document summarizes the key differences between vested interests and contingent interests when transferring property. A vested interest creates ownership for a person without conditions, while a contingent interest only provides a chance of ownership if a specified uncertain event occurs. A vested interest does not depend on fulfilling conditions, whereas a contingent interest solely depends on fulfilling its condition. A vested interest can pass to heirs upon the transferee's death, but a contingent interest may or may not pass to heirs depending on the nature of the contingency.
The document discusses oppression and mismanagement under company law. It defines oppression as any burdensome, harsh or wrongful act according to the dictionary. Lord Cooper defined oppression as conduct that departs from fair dealing and violates shareholders' expectations of fair play. The document outlines the grounds and process for applying for relief from oppression or mismanagement under Sections 397 and 398 of the Indian Companies Act, including required applicants and possible reliefs.
The document discusses the importance of competition and the need for competition laws when global trade is taking place on a single platform. It notes that India enacted the Competition Act 2002 to establish a new competition regime and foster competition in markets after economic reforms in 1991 made the previous MRTP Act inadequate. The Act aims to eliminate anti-competitive practices and promote competition for the benefit of consumers.
Day 1 Intro to CCP and Competition Law in PakistanAhmed Qadir
The document discusses the importance of competition in developing countries and the need for competition laws. It provides background on competition laws in Pakistan, from the original 1970 law to the current 2010 Competition Act. The current law established the Competition Commission of Pakistan and prohibits anti-competitive behaviors such as abuse of dominant market position, cartelization through prohibited agreements, deceptive marketing practices, and mergers or acquisitions that substantially lessen competition. It also stresses the importance of advocacy and increasing awareness of competition laws.
This document provides an overview of Google Scholar's free case law database, including:
- It includes cases from U.S. federal and state courts from 1791 to present.
- Users can search by citation, case name, judge, topic or other criteria and filter results by jurisdiction.
- Search results show how cited information and links to related cases or articles for further research.
This document provides information on an upcoming two-day law series masterclass on issues, challenges, and implications of competition law in Malaysia. The masterclass will cover topics such as cartels, prohibited agreements, abuse of dominance, investigations and enforcement by the Malaysian Competition Commission (MyCC). It will help participants understand Malaysia's Competition Act 2010 which takes effect on January 1, 2012 and risks of non-compliance such as substantial financial penalties. The event aims to educate senior management and legal advisors of businesses about competition law and compliance.
The document summarizes key concepts and provisions of US antitrust laws, including the Sherman Act and Clayton Act. It discusses prohibited activities like price fixing, monopolization, and mergers. It also outlines enforcement agencies and private rights of action under antitrust laws, as well as statutory exemptions.
Microsoft faced antitrust lawsuits in the late 1990s and early 2000s due to its dominance in the personal computer software market. The U.S. Department of Justice and several state attorneys general alleged that Microsoft abused monopoly power in operating systems and browsers. A trial court found that Microsoft held a monopoly and violated antitrust laws. The case resulted in a settlement requiring Microsoft to share application programming interfaces with competitors and allow more customer choice.
A monopoly is defined by a single seller facing the entire market demand. It sells a unique product and has extremely high barriers to entry that protect it from competition. Barriers include ownership of essential resources, legal protections like patents or licenses, and economies of scale. A natural monopoly arises when a single firm can produce at a lower average cost than multiple firms due to economies of scale. The monopolist is a price maker that searches its demand curve to find the profit-maximizing price where marginal revenue equals marginal cost. While monopolies may earn long-run profits, their higher prices and lower output compared to competition are economically inefficient.
This document discusses the impact of the World Trade Organization (WTO) on Pakistan's economy. It notes that Pakistan has a semi-industrialized economy that relies heavily on agriculture, contributing 25% to GDP. As a WTO member, Pakistan has reduced import tariffs from over 80% to 30% currently. However, the WTO's policies threaten Pakistan's agriculture sector through requirements to reduce subsidies while developed countries continue providing heavy subsidies. Maintaining a liberal trade regime but providing industry support and balancing imports and exports will be important for Pakistan's economic sustainability and growth under the WTO.
This document discusses labor relations and collective bargaining in sports. It covers topics such as antitrust laws like the Sherman Antitrust Act of 1890 and how they relate to labor acts and unions in sports. Collective bargaining agreements (CBAs) are formed out of negotiations between sports leagues and player unions, and outline the rights of both sides. When CBAs expire and new agreements cannot be reached, it can lead to strikes or lockouts that impact the league and all parties involved. The 1994 MLB strike is provided as an example of the lasting impacts a strike can have on revenue, attendance, and fan support.
Antitrust policy aims to judge the competitiveness of markets either by the performance of firms or by market structure. Key US antitrust laws include the Sherman Act, Clayton Act, and Federal Trade Commission Act. Recent major antitrust cases involved AT&T, IBM, and Microsoft. Mergers can be horizontal between competitors, vertical between suppliers and customers, or conglomerate between unrelated firms. Governments influence competition through antitrust policy as well as regulation, ownership, and industrial policies.
This document provides an overview of government regulation of corporate business in the United States. It covers the development of federal and state power to regulate business, securities laws like the Securities Act of 1933 and Securities Exchange Act of 1934, antitrust laws like the Sherman Antitrust Act, and the role of agencies such as the SEC and FTC. It also discusses corporate expansion tactics, their treatment under securities and antitrust laws, and circumstances for involuntary or voluntary corporate dissolution.
The document discusses competition and monopolies in the economy. It provides details on antitrust legislation in the US that was enacted to encourage competition and limit monopolies. The Sherman Antitrust Act of 1890 was the first such law, followed by others like the Clayton Act of 1914 and Robinson-Patman Act of 1936. These acts established regulatory agencies and defined prohibited practices like price discrimination and interlocking directorates. The types of mergers - horizontal, vertical, and conglomerate - are also explained along with examples. Finally, the role of government in regulating industries and balancing competition through oversight of mergers and business practices is summarized.
The document discusses different types of government regulations including social regulation, economic regulation, and antitrust regulations. It then provides examples of how governments regulate natural monopolies and industries through setting prices, limiting entry of new firms, and establishing regulatory agencies like the Federal Trade Commission. The document also covers the origins and key components of antitrust policy in the United States including the Sherman Act, Clayton Act, and landmark antitrust cases.
Theory and practice of anti monopolistic regulationBansiMadlani
This document discusses the theory and practice of anti-monopolistic regulation. It begins with an introduction that defines anti-monopoly and competition in the market. It then discusses types of anti-competitive behavior and three significant antitrust laws: the Sherman Act of 1890, the Clayton Act of 1914, and the Federal Trade Commission Act. The document presents case studies on the Apple vs Epic case and Reliance Industries. It also discusses methods to restrict monopoly like imposing specific or lumpsum taxes. The conclusion notes some myths regarding antitrust laws and their relevance today.
This document discusses antitrust policy and competition law. It provides definitions of antitrust law, outlines its three main elements which are prohibiting anti-competitive agreements, banning abusive behavior by dominant firms, and supervising large mergers. It also discusses objectives of antitrust policy, anti-competitive practices, federal antitrust laws in the US and India's Competition Act. Specific cases involving Microsoft, Standard Oil, IBM, and AT&T are analyzed. The document also summarizes criticisms of antitrust laws.
This document discusses competitive free markets and government regulation of markets. It outlines the criteria for perfect competition and threats to competition such as monopoly, oligopoly, and anti-competitive practices. It describes major US antitrust laws and enforcement by the Department of Justice and Federal Trade Commission. Specific anti-competitive practices like price fixing, mergers, and tying arrangements are explained. The document provides examples and discusses the economic and moral effects of threats to competition.
1. Monopolies have market power that allows them to raise prices without losing all demand. Barriers to entry like large capital requirements, patents, and government franchises prevent competition against monopolies.
2. A pure monopoly is a single firm with no close substitutes and significant barriers to entry. It faces the market demand curve and sets both price and quantity to maximize profits where marginal revenue equals marginal cost.
3. Monopolies restrict output and raise prices above marginal cost, leading to inefficient allocation of resources. Antitrust policy aims to remedy monopolies through legislation like the Sherman Act and agencies that enforce antitrust laws.
- Monopolies have market power that allows them to raise prices without losing all demand for their products. Barriers to entry like large capital requirements, patents, and government franchises can prevent competition in imperfectly competitive industries.
- A pure monopoly is a single firm that produces a unique product and faces no competition due to barriers that prevent other firms from entering the market. As the sole producer, the monopoly is the entire industry.
- Monopolies restrict output and charge higher prices than competitive firms, leading to inefficient resource allocation and welfare losses for society. Antitrust policy aims to promote competition and limit monopolies through legislation like the Sherman Act.
- Monopolies have market power that allows them to raise prices without losing all demand for their products. Barriers to entry like large capital requirements, patents, and government franchises can prevent competition in imperfectly competitive industries.
- A pure monopoly is a single firm that produces a unique product and faces no competition due to barriers that prevent other firms from entering the market. As the sole producer, the monopoly is the entire industry.
- Monopolies restrict output and charge higher prices than competitive firms, leading to inefficient resource allocation and welfare losses for society. Antitrust policy aims to promote competition and limit monopolies through legislation like the Sherman Act.
- An imperfectly competitive industry is one where single firms have some control over the price of their output through market power. Market power is a firm's ability to raise prices without losing all demand.
- A pure monopoly is a single firm industry where there are no close substitutes for the product and significant barriers prevent other firms from entering to compete for profits. Barriers to entry include government franchises, patents, large economies of scale, and ownership of scarce resources.
- A profit-maximizing monopolist will produce at the quantity where marginal revenue equals marginal cost to maximize profits. The monopolist restricts output and charges higher prices than under perfect competition, leading to inefficiencies.
1. The document discusses different types of market structures in economics including exchange economy, monopoly, oligopoly, and monopolistic competition.
2. An exchange economy refers to an interaction between agents who can exchange products based on a price system. There are two types - pure exchange economy and exchange economy with production.
3. A monopoly is dominated by one firm/entity and has no competition, which can lead to high costs for consumers. Oligopoly has a small number of firms that generate the supply and are interdependent on each other's actions. Monopolistic competition combines elements of monopoly and competition through product differentiation.
The document discusses different market structures including perfect competition, monopolistic competition, oligopoly, and monopoly. It provides details on the key characteristics of each structure such as the number of firms, level of control over prices, and examples. Perfect competition has many small firms, undifferentiated products, no control over prices or barriers to entry. Monopolistic competition has many firms but differentiated products giving some control over prices. Oligopoly has a few dominant firms that can influence prices through collusion. Monopoly has a single firm with complete control over prices.
The document discusses competition policy and law in India. It provides background on competition and benefits of competition for companies, consumers, and government. However, it notes that perfect competition is a myth. It outlines India's evolution of competition law from the MRTP Act to the current Competition Act, including provisions around unfair trade practices, restrictive trade practices, abuse of dominance, combinations, and intellectual property rights. It also presents some case studies on competition issues in mergers and acquisitions.
There are several options for regulating monopolies to address the inefficient outcomes they cause:
1. Public ownership, where the government supplies the good. This can increase output but governments are often inefficient providers.
2. Price regulation and anti-trust laws, like setting price ceilings or breaking up monopolies. While this benefits consumers, price controls are difficult to implement and anti-trust action is not always possible.
3. Doing nothing risks rent-seeking behavior where monopolies lobby for special treatment, restricting competition. However, intervention also risks unintended consequences.
4. Subsidies can increase monopoly output closer to socially optimal levels, though determining the right subsidy amount is challenging. Subsidies per
The document summarizes competition laws in India, including the MRTP Act and the Competition Act of 2002. It provides details on anti-competitive agreements, abuse of dominant position, regulation of combinations, and the role of the Competition Commission of India. It also briefly discusses cases involving the cement industry, airlines industry, and automobile industry. Competition laws in the US and UK are also summarized at a high level.
This presentation by Max HUFFMAN, Professor of Law, Indiana University, was made during the discussion “Taxi, ride-sourcing and ride-sharing services” held at the 65th meeting of the OECD Working Party No. 2 on Competition and Regulation on 4 June 2018. More papers and presentations on the topic can be found out at http://oe.cd/2gs.
Navigating Antitrust Regulations_ A Closer Look at LDM Global in the USA.pdfLDM Global
In the ever-evolving landscape of business regulation, antitrust laws stand as crucial guardians of fair competition. Antitrust regulations are designed to prevent monopolies, promote competition, and safeguard consumers' interests. Within the United States, companies like LDM Global must navigate these laws to ensure compliance and foster a healthy marketplace.
Critical Analysis Topic The Impact of Antitrust on Business P.docxfaithxdunce63732
Critical Analysis Topic: The Impact of Antitrust on Business
PRINCIPLE:
· Defined as laws that promote competition and prevent trusts, monopolies, or other business combinations that restrain trade (Graham, Baxter, & Davis, 2003)
· Designed to strengthen and maintain fair competition in the economy
· Legislation to control monopolies and restrictive practices in favor of competition
· Prevents monopoly, prohibits anti-competitive behavior, and unfair and deceptive business practices
· Fosters competition and protects consumers (Lawrence, Weber, & Post, 2005, p.188)
PRACTICE:
· Antitrust or competition law is a generally accepted practice in the U.S. and other developed nations
· Opinions vary on the effectiveness of antitrust laws due to vagueness in legislation
· Antitrust has become a standard of business operations throughout the world
· Derived from U.S. law originally structured to combat business trusts, commonly known as cartels
· Viewed as an alternative to regulation
PARTICULARS:
· Antitrust law originated in reaction to a public outcry over trusts – corporate monopolies at the turn of the twentieth century (1890)
· Protect and preserve economic competition
· Prohibit deceptive and unfair business practices
· Protect small businesses from economic pressures exerted by big business competition
· Preserve values and customs of rural America (Lawrence, Weber, & Post, 2005, p.192-193)
· Five (5) major issues of antitrust policy (Meier et al, 1998, p.75-108)
· Monopolies and trusts
· Collusive behavior
· Mergers
· Price discrimination
· Exclusionary practices
· Prohibited activities include (Antitrust Resource Manual, n.d., n.p.)
· Bid rigging; form of price fixing and market allocation
· Predatory pricing; practice of selling a products at low prices with intent of driving competitors out of the market, creates a barrier to market entry
· Price fixing; agreement between business competitors regarding pricing
· Tying; practice of making sale of one good conditional on purchase of another
· Vendor lock-in; situation in which a customer is dependent on a vendor
· Geographic allocation; agreement between competitors not to compete within territories
· Walker process fraud; illegal monopolization through maintenance and enforcement of a patent obtained via fraud
PERSONS:
· Champions of Antitrust: (Werden, 1992)
· Senator John Sherman (Ohio); sponsored legislation – led to Sherman Antitrust Act
· Congressman Henry De Lamar Clayton (Alabama); sponsored legislation – led to Clayton Antitrust Act, also known as the Antimerger Act
· Senator Joseph Robinson (Arkansas) and Congressman John Wright Patman (Texas); sponsored legislation – led to Robinson-Patman Act
· Congressman Emanuel Celler (New York) and Senator Carey Kefauver (Tennessee); sponsored legislation – led to Celler-Kefauver Act
· Senator Philip Hart (Michigan), Senator Hugh Scott (Pennsylvania), and Congressman Peter Rodino (New Jersey); sponsore.
This document discusses why consumers should be interested in competition law. It explains that competition law aims to protect the competitive process, not competitors, by prohibiting anti-competitive practices. When firms compete through fair means like innovation and efficiency, it benefits consumers through lower prices, better quality and more choice. Competition law establishes a competition authority to investigate anti-competitive conduct like cartels, abuse of dominance, and anti-competitive mergers. Enforcement of competition law promotes consumer welfare.
Externalities like pollution are costs not considered by buyers and sellers. This leads markets to produce inefficiently high pollution. Government intervention can correct market failures, but may also fail if it does not use incentive-based policies like effluent taxes and emissions trading rather than command-and-control regulations. The Coase Theorem finds private bargaining can achieve efficiency if property rights and low transaction costs allow negotiations, though obstacles often remain.
12 income distribution, poverty, and discriminationNepDevWiki
The chapter discusses income distribution and poverty in the United States. It introduces the Lorenz curve as a measure of income inequality, showing that inequality has changed little since 1929. The poverty line is defined as three times the cost of a minimal diet, and around 12-13% of Americans live below this level. Cash transfers like Social Security count towards the poverty line, while in-kind benefits like food stamps do not. Critics argue welfare reduces work incentives and administrative costs are high. Proposed reforms include a negative income tax and workfare programs. Discrimination and lack of equal pay can also impact individuals' wages.
$6
MFC
$4
$2
$1
Quantity of Labor
1 2 3 4 5
The document discusses labor markets and key concepts including:
- Marginal revenue product (MRP) determines a worker's contribution to total revenue.
- The demand curve for labor shows quantities firms will hire at different wage rates. MRP is the firm's labor demand curve.
- The supply curve of labor shows quantities workers will offer at different wage rates. The market supply is the sum of individual supply curves.
- A monopsonist faces the industry supply curve and pays the same wage, so its marginal factor cost (MFC) exceeds the supply curve
10 monopolistic competition and oligopolyNepDevWiki
Monopolistic competition and oligopoly belong to the category of imperfect competition. Monopolistic competition is characterized by many small sellers, differentiated products, and easy entry and exit. Firms have a negligible effect on price but some control over their own prices. In the short run, firms may earn economic profits, losses, or normal profits, but in the long run normal profits are earned. Oligopoly is characterized by few sellers, homogeneous or differentiated products, and difficult entry. Firms are interdependent and may engage in price leadership, nonprice competition, or form cartels which are prone to cheating. Both market structures allocate resources inefficiently compared to perfect competition.
The key characteristics of perfect competition are:
1) Many small firms
2) Homogeneous (identical) products
3) Free entry and exit from the market
4) Price-taking behavior
The correct answer is b. Perfect competition is characterized by homogeneous (identical) products, not a great variety of different products.
The marginal product of the third washing station is the change in total output from adding that station. With 2 stations they washed 100 cars. With 3 stations they washed 150 cars. So the change, or marginal product, of adding the third station is 150 - 100 = 50 cars per day.
The document summarizes key concepts from consumer choice theory in economics. It discusses the concepts of utility, total utility, marginal utility, diminishing marginal utility, and consumer equilibrium. It explains that consumer equilibrium occurs when the marginal utility per dollar is equal for all goods purchased. This can be used to derive the downward-sloping demand curve, as when price falls, consumption increases to restore equilibrium. The income and substitution effects are also summarized as complementary explanations for the law of demand. When price decreases, these effects work together to increase the quantity demanded.
05 price elasticity of demand and supplyNepDevWiki
Price elasticity of demand measures how responsive quantity demanded is to price changes. It is calculated as the percentage change in quantity divided by the percentage change in price. Elastic demand occurs when this is above 1, inelastic below 1, and unitary elastic at 1. Perfectly elastic demand is horizontal, while perfectly inelastic is vertical. Factors like substitutes, budget share, and adjustment time influence elasticity. Income elasticity measures responsiveness to income changes, while cross elasticity measures responsiveness between related goods. Price elasticity of supply measures responsiveness of quantity supplied to price. Tax incidence depends on demand elasticity, with inelastic demand leading to consumers paying more of the tax.
04a applying supply and demand analysis to health careNepDevWiki
This document discusses the application of supply and demand analysis to healthcare. It contains the following key points:
1) The demand curve for healthcare is downward sloping, as with other goods and services. The supply curve is upward sloping.
2) A copayment is the percentage of the cost of services that consumers pay out of pocket. Higher copayment rates decrease the quantity of healthcare demanded.
3) Shifts in the supply and demand curves for healthcare can be caused by changes in factors like the number of buyers/sellers, incomes, prices of substitutes, and resource prices.
4) An increase in demand leads to an increase in both equilibrium price and quantity, while a
A and c are correct. A public good is a good that, once produced, has two properties: (1) users collectively consume benefits and (2) no one can be excluded.
The document provides an overview of key concepts related to supply and demand. It defines the law of demand as stating that there is an inverse relationship between price and quantity demanded, ceteris paribus. It also defines the law of supply as stating that there is a direct relationship between price and quantity supplied, ceteris paribus. The document explains that a change in price results in a movement along the demand or supply curve, while a change in a non-price determinant results in a shift of the entire curve. Market equilibrium exists where quantity demanded equals quantity supplied.
02 production possibilities and opportunity costNepDevWiki
The key concepts from Chapter 2 of the document include:
1) The three fundamental economic questions are what to produce, how to produce, and for whom to produce.
2) Opportunity cost is the best alternative forgone in making a decision and represents the value of the next best choice not selected.
3) A production possibilities curve illustrates the maximum combinations of two goods an economy can produce given scarce resources, and assumes resources and technology are fixed in the short-run.
4) Points inside the curve represent inefficient production, while points on the curve are efficient. The law of increasing opportunity costs and marginal analysis are important concepts relating to the production possibilities curve.
5) Economic growth occurs when
This document contains an appendix that discusses key economic graph concepts:
- It defines direct, inverse, and independent relationships between two variables using graphs with examples.
- It explains the concept of slope and how it can be positive, negative, or variable depending on the shape of the curve.
- It distinguishes between movement along a curve, which occurs when the price changes, versus a shift in the entire curve, which happens when a third variable changes.
The document concludes with an practice quiz that tests understanding of these concepts.
01 introducing the economic way of thinkingNepDevWiki
This chapter introduces key economic concepts such as scarcity, resources, and the difference between microeconomics and macroeconomics. It explains that scarcity exists because human wants are unlimited but resources are limited, forcing individuals and societies to make choices. Resources are categorized as land, labor, and capital. Entrepreneurs organize these resources to produce goods and services. Economics studies how people make choices to satisfy wants. Microeconomics examines individual decision-making units while macroeconomics looks at whole economies. Models are used to understand and predict economic behavior.
13 the phillips curve and expectations theoryNepDevWiki
This document provides an overview of the Phillips Curve and expectations theory. It discusses the short-run and long-run Phillips Curves, and how adaptive and rational expectations theories explain the natural rate model. Adaptive expectations theory suggests that expansionary policies are useless long-run to reduce unemployment, while rational expectations theory indicates policies can be negated by anticipated effects. The document also reviews incomes policies and how different macroeconomic models like monetarism, Keynesianism, supply-side economics and the new classical school approach curing inflation.
The document provides an overview of key concepts in monetary economics from different schools of thought. It discusses the Keynesian, classical, and monetarist views. Specifically, it explains the three motives for holding money according to Keynes as transactions, precautionary, and speculative demand. It also describes the demand for money curve and how the equilibrium interest rate is determined by the intersection of money demand and supply. Changes in the money supply can then affect aggregate demand, output, prices, and employment under different economic models.
80
The money multiplier is 1/required reserve ratio = 1/0.25 = 4
A $1,000 decrease in excess reserves by the Fed would cause a $4,000 decrease in the money supply based on the money multiplier formula. The answer is c.
The document provides an overview of key concepts related to money and the Federal Reserve System. It defines money as anything that serves as a medium of exchange, unit of account, and store of value. It also discusses the functions and properties of money, different types of money including commodity and fiat money, and definitions of the money supply including M1, M2, and M3. Additionally, the summary explains the role of the Federal Reserve System in controlling the money supply and supervising banks, as well as other organizations like the FDIC that insure bank deposits.
09 federal deficits and the national debtNepDevWiki
The national debt is the total amount owed by the federal government to holders of government securities. It has more than tripled since 1980 as a result of accumulating budget deficits. Approximately 17% of the debt is held by foreign entities, representing a burden as it transfers purchasing power overseas. Crowding out occurs when government borrowing to finance deficits causes interest rates to rise, reducing private sector consumption and investment.
This chapter examines decisions made by public sector entities like politicians, bureaucrats and voters. It discusses how government expenditures have grown as a percentage of GDP since the 1950s, primarily due to increased spending on transfer programs. Federal tax revenues, especially individual income and payroll taxes, are the primary source of funding. The US has a lighter tax burden compared to other advanced countries when measured as a percentage of GDP. The chapter also covers principles of taxation like benefits received and ability to pay. It analyzes factors that can lead to inefficient government outcomes under public choice theory.
2. In this chapter, you will
learn to solve these
economic puzzles:
Can is market failure
universities water
Why doesn’t the and
colleges orrationale
improve
company electric
an economic engaging
education by
company compete?
forprice-fixing?
in regulation?
2
3. What is a Trust?
A combination or
cartel consisting of
firms that place their
assets in the custody
of a board of trustees
3
4. What is
Predatory Pricing?
The practice of one or
more firms temporarily
reducing prices in order to
eliminate competition and
then raising prices
4
5. When was the age of the
Robber Barons?
In the later part of the 1800’s
5
6. What was done to limit
the power of Trusts?
Congress passed laws
aimed at preventing firms
from engaging in
anticompetitive activities
6
7. What is the
Sherman Act?
The federal antitrust law
enacted in 1890 that
prohibits monopolization
and conspiracies to
restrain trade
7
8. What is the Clayton Act?
A 1914 amendment that
strengthens the Sherman
Act by making it illegal
for firms to engage in
certain anticompetitive
business practices
8
9. What business practices
were declared illegal
under the Clayton Act?
• Price discrimination
• Exclusive dealing
• Tying contracts
• Stock acquisition of
competing companies
• Interlocking directorates
9
10. Was the Clayton Act an
improvement over the
Sherman Act?
Although more specific
than the Sherman Act, the
Clayton Act is also vague
10
11. What is the Federal
Trade Commission Act?
The federal act that in 1914
established the Federal
Trade Commission (FTC)
to investigate unfair
competitive practices of
firms
11
12. What is the
Robinson-Patman Act?
A 1936 amendment to
the Clayton Act that
strengthens the
Clayton Act against
price discrimination
12
13. What is the basic
purpose of the
Robinson-Patman Act?
To prevent large sellers from
offering different prices to
different buyers where the
effect is to harm even a
single small firm
13
14. What is the
Celler-Kefauver Act?
A 1950 amendment to the
Clayton Act that prohibits
one firm from merging with
a competitor by purchasing
its physical assets if the
effect is to substantially
lessen competition
14
15. What are some key
Antitrust cases?
• Standard Oil Case 1911
• Alcoa Case 1945
• IBM Case 1982
• AT&T Case 1982
• MIT Case 1992
• Microsoft Case 1995
15
16. What was the outcome of
the Standard Oil Case?
The Rule of Reason
16
17. What is the
Rule of Reason?
The antitrust doctrine that
the existence of
monopoly alone is not
illegal unless the
monopoly engages in
illegal business practices
17
18. What was the outcome of
the Alcoa Case?
The Per se Rule
18
19. What is the Per se Rule?
The antitrust doctrine that
the existence of monopoly
alone is illegal, regardless
of whether or not the
monopoly engages in
illegal business practices
19
20. What was the result of
the IBM Case?
A switch back to the
Rule of Reason
20
21. What was the result of
the AT&T Case?
Technology made this
government-regulated
natural monopoly
obsolete, and AT&T was
found guilty of
anticompetitive pricing
21
22. What was the result of
the MIT Case?
Eight Ivy League schools
agreed to stop colluding to
fix prices, and MIT was
found guilty of price fixing
22
23. What was the result of
the Microsoft Case?
Microsoft was not allowed
to purchase Intuit Inc., a
competitor in the personal
finance software industry
23
24. How can firms avoid
charges of Price Fixing?
They can merge
into one company
24
25. When did a lot of Mergers
begin taking place?
In the 1980’s
25
26. What are the different
types of Mergers?
• Horizontal
• Vertical
• Conglomerate
26
27. What is a
Horizontal Merger?
A merger of firms that
competes in the same
market
27
30. What can be said about
Conglomerate Mergers?
They are generally
allowed because they
do not significantly
decrease competition
30
31. What can be said
about Antitrust Laws
in other Countries?
They are weak in
comparison to U.S.
antitrust laws
31
32. What is the history of
Government Regulation?
From the later part of the
1800’s to the 1970’s, there
was an increase in
regulation; in the 1970’s
there was a movement
away from regulation
32
33. What is the basic
argument in favor of
Government Regulation?
Market failure
33
34. In what ways does the
Market Fail?
• Natural monopoly
• Externalities
• Imperfect information
34
35. What is a
Natural Monopoly?
An industry in which long-
run average cost is
minimized when only one
firm serves the market
35
36. What is
Marginal Cost Pricing?
A system of pricing in
which the price charged
equals the marginal cost
of the last unit produced
36
37. P Regulated Monopoly
$50
Fair return price efficient price
$40
$30 A
$25
$20 B
$15
LRAC
$10
$5 MR C LRMC
1 2 3 4 5 6 7 D9 Q
8
37
38. What is a
Normal Profit?
The accounting profit
required to induce a
firm’s owners to
employ their
resources in the firm
38
39. Do Production Costs
include Normal Profit?
Yes, because normal profit
is considered a necessary
expense of a business
39
40. What kind of Profit is
made at the
Fair Return Price?
Normal Profit
40
41. What happens when
Pollution is present?
Pollution causes polluting
firms to overproduce, while
causing firms that pay the
cost of cleaning up the
pollution to underproduce
41
42. What can be done when
the Externality of
Pollution is present?
The government can
regulate the industry to
minimize the pollution
42
43. What happens with
Imperfect Information?
Deficient information on
unsafe products can cause
consumers to overconsume
a product
43
44. P Impact of Imperfect Information
$20
E1 S
$15
E2
$10 D1
$5
D2
25 50 75 100 Q
44
45. Decrease in
quantity
supplied
Increase in
Demand
Consumers
informed of
defect
45
47. Key Concepts
• What is a Trust?
• What is Predatory Pricing?
• What is the Sherman Act?
• What is the Clayton Act?
• What is the Federal Trade Commission Act?
• What is the Robinson-Patman Act?
• What is the Celler-Kefauver Act?
• What is the Rule of Reason?
• What is the Per se Rule?
47
48. Key Concepts cont.
• What are the different types of Mergers?
• What is a Horizontal Merger?
• What is a Vertical Merger?
• What is a Conglomerate Merger?
• What can be said about Antitrust Laws in other
• What is a Natural Monopoly?
• What happens when Pollution is present?
• What happens with Imperfect Information?
48
50. A trust is a cartel that places the
assets of competing companies in the
custody of a board of trustees. During
the last decades of the 19th century,
trusts engaged in anticompetitive
strategies to eliminate competition and
raise prices, such as predatory pricing.
50
51. The Sherman Act of 1890 and the
Clayton Act of 1914 are the two most
important antitrust laws. The Sherman
Act marked the first attempt of the U.S.
government to outlaw monopolizing
behavior. Because this act was vague, the
Clayton Act was passed to define
anticompetitive behavior more precisely.
51
53. The Robinson-Patman Act of 1936
strengthened the Clayton Act by
prohibiting certain forms of price
discrimination. This law is called the
“Chain Store Act” because it was
aimed at large retail chain stores that
were obtaining volume discounts.
53
54. The Celler-Kefauver Act of 1950
strengthened the Clayton Act declaring
illegal the acquisition of the assets of
one firm by another firm if the effect is
to lessen competition.
54
55. The rule of reason and the per se
rule are the two main philosophies the
courts have used in interpreting
antirust law. Under the rule of reason,
monopolist were not subject to
prosecution unless they acted in an
anticompetitive manner.
55
56. The Supreme Court decision in the
Alcoa case of 1945 replaced the rule of
reason with the per se rule, which
states that the mere existence of
monopoly is illegal. Today, the trend is
in favor of dominant firms because of
international competition.
56
57. A horizontal merger is a merger of
two competing firms. A vertical
merger is a merger of two firms where
one produces an input used by the
other firm. A conglomerate merger is a
merger of two firms producing
unrelated products.
57
58. Deregulation is a movement that
began in the1980’s to eliminate
regulations primarily in the
transportation and telecommunications
industries. Today, the current trend is
toward further deregulation resulting
from federal budget cuts.
58
59. Marginal cost pricing is a
competitive pricing strategy for a
regulated natural monopoly. Using this
approach, regulators set the
monopolist’s price equal to its
marginal cost. Another method is for
regulators to establish a fair-return
price equal to long-run average cost
and the monopolist earns zero
economic profit.
59
60. Regulation of a natural monopoly
is justified on the basis of market
failure. Two other cases based on
market failure include externalities and
imperfect information.
60
61. P Regulated Monopoly
$50
Fair return price efficient price
$40
$30 A
$25
$20 B
$15
LRAC
$10
$5 MR C LRMC
1 2 3 4 5 6 7 D9 Q
8
61
63. 1. Which of the following is illegal under
the Sherman Act?
a. Attempts to monopolize.
b. Price fixing.
c. Formation of cartels.
d. All of the above are illegal.
D. The Sherman Act of 1890 is the federal
antitrust law to curb trusts, but the
federal government did not win a notable
case until 1911.
63
64. 2. Officers of five large building-materials
companies meet and agree that none of
them will submit bids on government
contracts lower than an agreed-upon level.
This is an example of
a. price fixing.
b. vertical restriction.
c. a tying contract.
d. an interlocking directorate.
A. The Sherman Act was enacted with
vague language, but price fixing is clearly
a “conspiracy in restraint of trade”.
64
65. 3. A fabric shop cannot sell Singer sewing
machines if it also sells other brands of
sewing machines. This is an example of
a. a resale price maintenance.
b. territorial restrictions.
c. a tying agreement.
d. exclusive dealing.
D. If the effect is to “substantially lessen
competition” such as an agreement between
a manufacturer and a retailer is a violation
of the Clayton Act of 1914.
65
66. 4. Under the Clayton Act, horizontal mergers
by stock acquisition were
a. not considered.
b. illegal if they could be shown to lessen
competition.
c. illegal under any circumstances.
d. legal if they could be shown to lessen
competition.
B. Horizontal mergers are combinations
among competitors in the same industry
which, if allowed, eliminate existing
competition.
66
67. 5. Under the Clayton Act, which of the
following was illegal even if it was not
shown to lessen competition substantially?
a. Price discrimination.
b. Tying contracts.
c. Horizontal mergers by stock acquisition.
d. Interlocking directorates.
D. Interlocking directorates is the
situation in which a director of one
company serves on the board of
directors of a competing company.
67
68. 6. The importance of the Federal Trade
Commission Act of 1914 is that it
a. set up an independent antitrust agency
with the power to investigate complaints.
b. strengthened the law against mergers.
c. strengthened the law against price
discrimination..
d. none of the above.
A. The FTC Act of 1914 established a five-
member commission appointed by the
president to investigate “unfair methods
of competition.”
68
69. 7. Which of the following is concerned
primarily with price discrimination?
a. The Sherman Act.
b. The Clayton Act.
c. The Robinson -Patman Act.
d. The Celler-Kefauver Act.
C. The Robinson-Patman Act of 1936 is
an amendment to the Clayton Act that
strengthens the Clayton Act against
price discrimination.
69
70. 8. Which of the following is concerned
primarily with mergers?
a. The Sherman Act.
b. The Clayton Act.
c. The Robinson-Patman Act.
d. The Celler-Kefauver Act.
D. The Celler-Kefauver Act is called the
“antimerger act” because it closed the
loophole in the Clayton Act by prohibiting
mergers by sale of physical assets.
70
71. 9. The Utah Pie case was brought under
which of the following laws?
a. The Sherman Act.
b. The Federal Trade Commission Act.
c. The Robinson-Patman Act.
d. The Celler-Kefauver Act.
C. Utah Pie was a small frozen desert pie firm in
Salt Lake City that used three outside
national competitors for price discrimination.
The Supreme Court ruled in Utah Pie’s favor.
71
72. 10. Although U.S. Steel controlled nearly
75% of the domestic iron and steel
industry, in 1920 the Supreme Court ruled
that the firm was not in violation of the
Sherman Act because there was no
evidence of abusive behavior. What
antitrust doctrine was the court applying
in this case?
a. The rule of reason.
b. The per se rule.
c. The marginal cost pricing rule.
d. The natural monopoly rule.
A. The rule of reason applied when a firm was
not engaged in anticompetitive behavior.
72
73. 11. In which antitrust case did the Supreme
Court begin to apply the per se rule to
determine whether a firm was in violation
of the Sherman Act?
a. The Standard Oil case.
b. The Alcoa case.
c. The IBM case.
d. The MIT case.
B. The Supreme Court decision in the Alcoa
case of 1945 replaced the rule of reason with
the per se rule, which states that the mere
existence of monopoly is illegal.
73
74. 12. The Interstate Commerce Commission
(ICC) was established in
a. 1887.
b. 1890.
c. 1929.
d. 1933.
A. The ICC was established for the original
purpose of regulating rail prices by reducing
duplicate trains, depots, and tracks.
74
75. 13. Today, the Civil Aeronautics Board
(CAB) regulates airline
a. ticket prices.
b. routes.
c. safety.
d. all of the above.
e. none of the above; the CAB was
abolished in 1984.
E. The CAB was established in 1938 to
regulate airline fares and air routes.
75
76. 14. Which of the following provides the
basis for regulation?
a. Natural monopoly.
b. Externalities.
c. Imperfect information.
d. All of the above.
D. In each of these cases, the argument in
favor of regulation is market failure.
76
77. 15. Consider a regulated natural monopoly. If
the regulatory commission wants to establish
a fair-return price, then it should set a price
ceiling where the demand curve crosses the
monopoly’s long-run
a. marginal revenue curve.
b. average revenue curve.
c. marginal cost curve.
d. average cost curve.
D. One method for regulators to establish a
fair-return price is to set price equal to long-
run average cost and the monopolist earns
zero economic profit
77
78. Internet Exercises
Click on the picture of the book,
choose updates by chapter for
the latest internet exercises
78