| Term | Definition |
|---|
| Regulating Monopoly | Least disruptive means of dealing with monopolies and monopoly power. |
| Nationalizing Industries | Industries taken over by the government to be run and controlled. Example: Amtrak |
| Laissez-Faire | Government's internvention policy concerning monopoly - leave the firm alone. |
| Contestable Market | The potential threat of other firms entering the market moderates prices in a monopolistic market. |
| Encouraging Concentration | Government's encouragement of less-competitive markets who thrive because they are technically superior, which in turn generates lower prices due to economies of scale production. |
| Splitting Up Monopoly | Because monopolies "violate the rules of the game," government should break up monopolies into smaller firms. |
| Regulation | Government intervention to alter the behavior of the firms - while ownership remains private, pricing and production decisions are monitored by a regulatory agency, reporting directly to a government body. |
| Deregulation | The process by which governments remove, reduce, or simplify restrictions on business and individuals with the intent of encouraging the efficient operation of markets. |
| Nationalization | Taking an industry or assets into the public ownership and control of the national government - price and production decsions are made by an administration agency of the federal government. |
| Antitrust Policy | The body of laws that foster market competition by prohibiting monopolies and oligopolies from exercising excessive market power. |
| Sherman Antitrust Act of 1890 | Antitrust legistation stating: "Every contract, combination, or conspiracy in restraint of trade is declared to be illegal." Terminology in the act was vague and difficult to prove. |
| Clayton Act of 1914 | Defined four specific anticompetitive activities, making antitrust easier to enforce. |
| Federal Trade Commission Act of 1914 | Established the FTC to monitor markets - investigating unfair and deceptive practices and initiating complaints as needed. |
| Rule of Reason | The rule that to be illegal, an action must be unreasonable in a competitive sense and the anticompetitive effects must be demonstrated. Size alone is insufficient evidence to rule against a firm in antitrust lawsuits. |
| Per Se | A judicial standard by which the size of a firm alone is sufficient evidence to rule against a firm in antitrust cases. |
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