Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question

Transcribed Image Text:**Understanding Antitrust Authorities' Reactions**
**Considerations for Antitrust Cases:**
**a. A proposed merger of Ford and General Motors.**
- They would block this horizontal merger because it violates Section 7 of the Clayton Act.
- They would block this horizontal merger because it violates Section 1 of the Sherman Act.
- They would allow this horizontal merger unless both firms had very large market shares and the resultant merger would substantially lessen competition.
**b. Evidence of secret meetings by contractors to rig bids for highway construction projects.**
- They would allow this.
- They would charge these firms with price-fixing, which violates Section 7 of the Clayton Act.
- They would charge these firms with price-fixing, which violates Section 1 of the Sherman Act.
**c. A proposed merger of a large shoe manufacturer and a chain of retail shoe stores.**
- They would block this merger because it violates Section 7 of the Clayton Act.
- They would block this merger because it violates Section 1 of the Sherman Act.
- They would allow this vertical merger unless both firms had very large market shares and the resultant merger would substantially lessen competition.

Transcribed Image Text:### Antitrust and Merger Considerations
**c. A proposed merger of a large shoe manufacturer and a chain of retail shoe stores.**
- They would block this merger because it violates Section 7 of the Clayton Act.
- They would block this merger because it violates Section 1 of the Sherman Act.
- They would allow this vertical merger unless both firms had very large market shares and the resultant merger would substantially lessen competition.
---
**d. A proposed merger of a small life-insurance company and a regional candy manufacturer.**
- They would allow this conglomerate merger.
- They would block this conglomerate merger because it violates Section 7 of the Clayton Act.
- They would block this conglomerate merger because it violates Section 1 of the Sherman Act.
---
**e. An automobile rental firm that charges higher rates for last-minute rentals than for rentals reserved weeks in advance.**
- They would not interfere with this price discrimination.
- They would block this price discrimination because it violates Section 7 of the Clayton Act.
- They would block this price discrimination because it violates Section 1 of the Sherman Act.
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps

Recommended textbooks for you


Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON

Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON


Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON

Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON

Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning

Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education