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Antitrust Economics Assignment Help

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A Background on Antitrust Economics

Antitrust economics is an important field in economics called industrial organization. This branch of economics tries to explain the corporate structure as well as the competitive motivation of commercial entities and industries. If economists are referring to the structure of a given industry, they mean the total number of companies in a market that are responsible for producing goods or services; the obstacles faced by new companies trying to gain entrance into the market; the level of product dissimilarities.

Industry Structures

The structure of a given industry where homogeneous products or similar products or services can be explained in three various ways:

  1. Perfectly Competitive (there are no barriers to new business entrants, many sellers without any dominant pricing power),
  2. Purely Monopolistic (barriers to new business entrants, one seller has total power over pricing), or
  3. Oligopolistic (barriers to new business entrants, a few sellers that have a certain degree of pricing power).

 Introduction to Antitrust Economics

Antitrust laws exist so as to ensure a competitive economy. This is the type of economy that is based on the assumption that through competition, the wants of the consumer, will be met using the lowest price by sacrificing the fewest quantity of resources. In an economic sense, competition is used to maximize both productive efficiency and allocative efficiency. As it tries to foster a climate for a competitive market, the antitrust laws depend on the functioning of the system of the market that is used to make a decision on:

  • The type of product to be produced,
  • The manner that scarce resources will be distributed among the different production factors, and 
  • The people that will be the end consumers of the products after the process of production.

This system of market supports the notion that the consumer will make the right decision as to what should be produced and competition among the product manufacturers will decide the company that will produce the goods. 

The antitrust laws are an executive agreement that an imperfect system exists – realistically, there are no competitive markets. Their main purpose is to ensure that the gap between the ideal competition and private rule, in reality, doesn’t become excessively wide. 

A Glossary of Common Terms Used in Antitrust Economics

If you are looking for quality Antitrust Economics assignment help, you could use our help. WE can create a cast of studies on certain potentially punishable practices. When it comes to antitrust economics, there are several potentially punishable practices. These terms include:

Exclusive Dealing: This is a scenario whereby a company law forbids its distributors and suppliers from selling any product from the competitor.

Exclusive Territories: A company assigns a distributor to a geographical area. They will in turn for bid all other distributors and suppliers from operating or working in that area.

Predatory Pricing: A company will usually set the price of a certain product to be lesser than the marginal cost used to produce this product. This tactics is used to chase its business competitors out of business.

Refusals to Deal: This is a case where a company forbids its competitor from buying or using any scarce resources (which is known as essential facilities) which is required to continue their business operation.

Price Discrimination: This is a case whereby a company expects different customers to pay different prices for the same goods or product. 

Resale Price Maintenance: This is a condition whereby the manufacturer fix its product pricing strategy as a minimum retail price.

Tie-In Sales: A company determines the purchase of a certain product whenever a different product is bought. 

What is the Purpose of Antitrust Laws?

Antitrust laws are used to prohibit companies from doing certain things to become a monopoly. They usually prohibit what other people see as fraudulent practices which companies may be looking to outperform their business rivals. Put in a different way, antitrust laws are made to stop companies from using unfair tactics in order to gain more market leverage than their .

What does Antitrust Economics Forbid?

Antitrust laws or economics are not implemented to put a stop to companies who have labored hard to control a large share of the market. Antitrust laws are in place to prevent companies from looking to create a monopoly through the use of unfair tactics.

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