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EconGovTest2StudyGuide - S umma ry Judgment J udgment...

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Summary Judgment – Judgment rendered by a court in response to a motion by one of the parties, claiming that the lack of a question of material fact in respect to an issue warrants disposition of the issue without consideration by the jury. Tying Agreement – An agreement that a seller will only sell a specified product to a buyer if the buyer also agrees to purchase anther product. Illegal Monopolization : Monopolization - is illegal conduct undertaken by a single firm that already has monopoly power and is designed to enable the firm to preserve its monopoly position. It is condemned under § 2 of the Sherman Act. Is it illegal to be a monopolist? No, merely being a monopolist or having monopoly power are not enough by themselves to violate Section 2. What is monopoly power? The Supreme Court has described monopoly power as “the power to control prices or exclude competition.” Relevant Product Market: (Product and Geographic Market) A relevant product market is the smallest grouping of products “for which 1) The elasticity of demand and 2) The elasticity of supply are sufficiently low that a firm with 100% of that market could profitably reduce output and increase price substantially above the competitive level.” Economic theory says that a seller’s power to raise its price above its marginal cost depends on: 1. Its % market share, 2. Price elasticity of market demand, 3. Elasticity of supply of its competitors and potential competitors. A relevant geographic market is an area in which a hypothetical monopolist of the product could profitably increase its price above the competitive level (a small but significant, non-transitory price increase) without (1) large numbers of customers immediately turning to alternative supply sources outside the area (i.e. elasticity of demand is low ), and (2) Producers outside the area quickly flooding the area with substitute products (i.e. elasticity of supply is also low ).
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“The offense of monopoly under § 2 of the Sherman Act has two elements: (1) the possession of monopoly power in the relevant market and (2) The willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historical accident.” An Implicit: “Essential Facilities Doctrine?” Require the plaintiff to show: (1) Control of the essential facility by a monopolist; (2) a competitor’s inability practically or reasonably to duplicate the essential facility; (3) the denial of the use of the facility to a competitor; and (4) The feasibility of providing the facility. Monopsony: there is only one buyer of a good or service. Oligopsony: there are only a few buyers of a good or service. Monopsony may be more likely for buyers of specialized goods or services.
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