The Department of Justice has challenged the merger of two firms, and the case has ended up in the Supreme Court. The two firms argue that they will not use their monopoly power to raise prices or to cut output. Under what judicial standard would their merger be allowed, and under what judicial standard would their merger be disallowed?
The merger would be allowed under the rule of reason, which says that a long as a firm behaves reasonably, its size does not matter. The merger would be disallowed under the per se standard, which says that having a monopoly position is undesirable, no matter how the firm behaves.
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Which of the following is a difference between a second-price sealed-bid auction and an English auction?
A) The highest bidder wins in a second-price sealed-bid auction while the second-highest bidder wins in an English auction. B) The second-highest bidder wins in a second-price sealed-bid auction while the highest bidder wins in an English auction. C) Bids are placed privately in a second-price sealed-bid auction while bids are placed publicly in an English auction. D) Bids are placed one after another in a second-price sealed-bid auction while bids are placed simultaneously in an English auction.
Demand curves for the services of productive resources
A) have no meaning, because people must have income in order to live. B) obey the law of demand. C) tend to be perfectly elastic in the long run because any resource can ultimately function as a substitute for any other. D) tend to be perfectly inelastic in the short run as long as production processes are determined by technology.
Restricting demand will lower inflation but
A. aggravate the unemployment problem. B. reduce the unemployment rate. C. have no impact on the unemployment rate. D. None of the above is correct.
If the U.S. continually runs a bilateral trade deficit with Japan, then
a. Japan's trade policies must be unfair to the United States. b. the United States is worse off as the result of its trade with Japan. c. Japan is the low-cost supplier of goods that we import intensively. d. both a and b are true.