Glossary of Antiregulations and Policies

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Created by jgc09

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Government regulations designed to promote competition among firms
Antitrust Policies/Competition Policy
First US Federal Attempt to address monopoly power
The Sherman Act

-Amended and clarified the Sherman Act
-Goal was to prevent mergers that would create monopolies
Clayton Antitrust Act of 1914
Established in 1914 to enforce antitrust laws in the US
Federal Trade Commission
What is considered when approving a merger?
-Concentration of industry
-Market definition
-Horizontal v Vertical

What HHI is too high and will cause the Justice Department to take a closer look
-Geographic Definition of market
-Definition of category og gods and services

Known as...?

Defining the market/Market Definition
-Combines two firms that sell the same good or the same type of good
-Always increases concentration
Horizontal Merger
Combining of two firms, one of which supplies the other
Vertical Merger
-When a firm sets a price below the breakeven point, hoping to drive competitors out of business, after which they’ll have a monopoly
-Illegal in the US
-In the short run it benefits consumers

Predatory Pricing
Occurs when firms conspire to set prices for goods sold in the same market.

Price Fixing
Are constraints that firms place on other firms above or below them on the supply chain
Vertical Restraints
Is a system where retailers or wholesalers are given exclusive rights to sell the company’s product in an area.

Exclusive Territories
Requires that retailers do not sell competing products
Exclusive Dealing
-Forbid retailers from selling a product below a designated price
Retail Price Maintenance Agreements
An effort to reduce the regulations controlling prices and entry into industries

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