Chapter 9.3, Problem 3R

To determine

To discuss: The reasons Sherman Antitrust Act and the Clayton Act limited the profits for some businesses.

Answer to Problem 3R

The Sherman Antitrust Act and the Clayton Act passed by the US government limits the profits of some businesses by restricting anti-competitive business practices that encourage unfair competition in the market.

Explanation of Solution

The Sherman Antitrust Act is an act passed by the U.S. government which restricts anti-competitive agreements and monopoly practices that exist in the market. The main purpose of the act is to create a market that holdshealthy and fair competition and protects consumers from anti-trade practices.

Clayton Act is a modification act to the Sherman Antitrust Act. It covers those features which were outside the purview of the Sherman Antitrust Act. It forbids price discrimination amongst different purchasers, activities that reduce market competition like mergers and acquisitions, etc.

These acts have limited the profits for some businesses by restricting activities that promote unfair competition in the market.

Economics Concept Introduction

Introduction:The Sherman Antitrust Act was passed to protect trade against unlawful practices and monopoly. The Clayton Act is a meremodification act to the original Sherman Antitrust Act.