egt1 task3

Topics: Monopoly, Cartel / Pages: 3 (726 words) / Published: Mar 19th, 2014
EGT-1 Task 3 Revised

A. Summarize the four major pieces of legislation collectively known as the Antitrust laws.

United States antitrust law is a collection of federal and state government laws, which regulates the conduct and organization of business corporations, generally to promote fair competition for the benefit of consumers. The four major pieces of legislation known as the Antitrust Laws include: The Sherman Act, The Clayton Antitrust Act, The Federal Trade Commission, and the Celler-Kefauver Act. The Sherman Act was created in 1890 had two major provisions which was to prohibit conspiracies to restrain trade and also to outlaw monopolization. In 1914 the Clayton Act was passed to expand off of the Sherman Act. The Clayton Act strengthened the Sherman Act in several ways: price discrimination, typing contracts, acquisition, and interlocking directorates. In 1914, the Federal Trade Commission Act (FTC) was created to enforce antitrust laws and the Clayton Act in particular. The FTC investigates unfair competitive practices and when appropriate issues cease-and desist orders. In 1950 the Celler-Kefauver Act was created to close the loophole the was left available from the Clayton Act’s Section 7. This clause was put in place to stop a firm from acquiring stocks in a competitive firm in order to merge. The Celler-Kefauver Act closed that loophole in order to prevent any firm from reducing the competition. (McConnell 375)

B. Discuss the intended purpose of industrial regulation as it applies to the following market structures:

An oligopoly is a market form in which a market or industry is dominated by a small number of sellers. An oligopoly has the ability to determine its own price and output. (McConnell 164) Industrial regulation is used to reduce the market power of monopolies. It’s also used to reduce the market power of oligopolies, prevent collusion and increase market competition. A pure monopoly is a market structure in which only one

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