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lec11 - forces its customers to buy another product only...

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1 1 Antitrust Laws Sherman Act Clayton Act 4 Antitrust Laws Sherman Act: “Every person who shall monopolize… shall be deemed guilty…” Mere size is not an offense. Acts whose purpose is to gain or maintain monopoly are illegal. 7 What kinds of actions are illegal? Standard Oil Eastman Kodak Alcoa 8 Clayton Act: outlawed specific acts when the effect may be to substantially lessen competition. 9 Clayton Act: outlawed specific acts when the effect may be to substantially lessen competition. Specific acts: Tying agreements Mergers Price discrimination 10 These acts are illegal ONLY IF they are expected to lessen competition.
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2 11 Clayton Act: Only effect of acts matters, not intent. 14 Tying Contracts Firm that has a monopoly in one product
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Unformatted text preview: forces its customers to buy another product only from it. Examples: IBM machines and computer cards Auto manufacturers and car radios 17 Mergers Horizontal mergers: Firms in same business merge. Generally, illegal if merged firm has 12% or more market share. Example: Bethlehem Steel and Youngston Shares: 16.3% + 4.6% = nearly 21% 21 Price Discrimination Morton Salt Grocery A Grocery B Grocery C $1.50/case $1.60/case $1.60/case Morton Salt sells to grocery A at a lower price than to other groceries. Grocery A has an advantage that lessens competiton. Note: Loss of competiton does not occur in industry of culprit firm....
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