BSLW1021 Chapter Notes - Chapter 5: Federal Trade Commission Act Of 1914, Sherman Antitrust Act, Clayton Antitrust Act
Document Summary
Sherman anti-trust act: regulates anticompetitive behavior among horizontal competitors. Monopolization: determine market power, ability to control price and exclude competitors. Tying: making a buyer buy an additional product to get the one he/she wants. Vertical price fixing: manufacturer to retailer with min/max price. Can null mergers if it can cause a monopoly of lessen competition through a divestiture order. Prohibits price discrimination, charging one customer something and another something else. Price discrimination is okay if: difference in grade, quality, quantity, transportation cost, good faith effort to meet competition, different marginal costs, deterioration of goods, close out sale also null vertical mergers if it lessens competition. Prohibits charging different price to buyers when marginal costs stay the same. Offering incentives to one party and not the other is illegal. Exclusive deals: okay as long as there is enough interbrand competition ex. Justified in a competitive sense because without them retailers might cut prices reducing the brand.
