econ essay - Matthew O'Donnell Microeconomics Thursday...

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Matthew O’Donnell Microeconomics Thursday, December 06, 2007 Whole Foods Monopoly? The Federal Trade Commission has presented a case to block Whole Foods from buying Wild Oats, stating that it would become a monopoly because there is such a small market in the part of retail. The FTC calls the grocery store market an oligopoly by not allowing the two corporations to merge, because if they were allowed to merge there would not be any competition from another mainstream grocery store to compete. The article states there is only two possible situations, that Whole Foods is too well in the grocery market and cannot be allowed to buy another chain, or they are not doing as well as the competition and needs to merge with Wild Oats in order to be able to compete. Also both Whole Foods and Wild Oats have organic or natural departments which are not available in many other firms, and by allowing them to merge these lifestyle foods would have no competition from other supermarkets. That is what the court will have to decide. Whole Foods argues that it is an incredibly intense market, and that in fact some stores are remodeling to be similar to Whole Food ones. Many lawyers also share this belief and think that this is a very unusual and aggressive case brought forth by the FTC. This controversy has even shaved quite a few percentage marks off of Whole Food’s stock value. This also seems odd for the FTC because under Bush, the Commission has been much more lax on merges, allowing big names such as Whirlpool and Maytag and Sirius Satellite Radio and XM Satellite Radio. The reason FTC believes this would not be fair to the consumers is that when these two companies
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This note was uploaded on 04/07/2008 for the course ECONOMICS 103 taught by Professor Crocker during the Fall '08 term at UMass (Amherst).

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econ essay - Matthew O'Donnell Microeconomics Thursday...

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