Antitrust
A common reason for antitrust investigation is with mergers and acquisitions. The Department of Justice must approve proposed mergers, to ensure that the merger or acquisition activity does not unduly restrain competition in an industry or market. One recent example of antitrust investigation came with the bids by Dollar General and Dollar Tree to acquire Family Dollar. The concern was that post-merger, the combined entity would be able to constrain competition and by virtue of that raise prices, in a market whose customers depend on access to those low prices (Heneghan, 2015).
Antitrust behavior comes with it costs to the economy. The underlying principle of antitrust legislation is that when there is insufficient competition in a market, the participants in that market have the ability to exploit that lack of competition, and raise their prices to a level that would not occur if the market was competitive (Investopedia, 2015). The government regulates industry so that firms cannot engage in antitrust behavior. In mergers and acquisitions, when one of these is proposed, the government will evaluate the impact that the merger -- if it goes through -- would have on competition. The level of competition is sometimes evaluated with the...
Industries that face stiff competition may favor and encourage an aggressive approach from employees that produces rapid results, rather than thoughtful, strategic action. When the gains cannot be realized in the desired time frame, there is a temptation to implement short cuts; resulting in fraud." (Price; Norris, 2009) That however is not a justification, although it prompts some regulations on the way industries operate. The Law Catches Up Today the criminal
Microeconomics Over the last few years, it is evident that the airline industry in the U.S. has been experiencing long standing as well as novel challenges (The American Antitrust Institute, 2012). These includes the increase in the price of fuel, slowing demand for air travel and pressures to expand globally. Consolidation among various airlines across the country is the most common remedy that most of the airline firms are applying. In
Economics The situation in the European air cargo industry bears many hallmarks of a cartel, and this was the finding of the European Commission. The OECD (2002) defines a cartel as "a formal agreement among firms in an oligopolistic industry…on matters such as price, total industry output, market shares, allocation of customers, allocation of territories, bid-rigging, division of profits or the establishment of common sales agencies." The main difference between this
Change This study analyzes outsourcing trends in the next decade. The study assesses this by focusing on the past and current trends, problems and issues in outsourcing via semi-structured interviews. Major trends and processes will be revealed and assessed for their relevancy, depth and breadth. Companies belonging to most industries are very much considered to be the units that are vertically integrated, or so-called usual industrial firms (Stigler, 1951), where activities
Microsoft) Question There are great differences among Americans in terms of income and the reports by the U.S. Census Bureau indicate according to a December 1997 data that in the last twenty years "incomes of the richest fifth increased by 30% or nearly $27,000 after adjusting for inflation." The average income of these people was $117,500 and that is 13 times the bottom one-fifth's income of $9,250. but, are these people
Electricity Restructuring Restructuring of the electricity industry has been approached with a top-down approach that has failed to result in benefits to consumers. Economic theory states guidance on conditions that are essential for well-functioning markets to exist in which the consumer benefits and the firms utilize innovation to control costs. There is currently a debate surrounding the importance of each 'condition' as well as the resulting harm when conditions are unmet.
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