Lecture 19 - Lecture 19 15:05 Pegs : Cartels and Antitrust...

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Lecture 19 15:05 Pegs     : Cartels and Antitrust New Entry = Econ Threat to Sustained Monopoly Power Keeping Competition/ New Entrants at Bay Cartels or mergers between rivals Tariff, Quota, or License protection Superior Entrepreneurial Skill o Build better mousetrap – and protect intellectual property with patents or  trade secrets Control over indipensable input Economics of scale Economics of scale Network effect or tipping Used-to-be Network Advising. Price Makers- Public Policy Rather buy an open market or one from a cartel? Sherman Act – Every contract or conspiracy would be illegal – meet with your  rival someday – and divide up the market, restrict the output – or collectively  raise price – the law is so strict that you may go to jail for that. Per – say law against cartels.
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Lecture 19 - Lecture 19 15:05 Pegs : Cartels and Antitrust...

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