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Econ Final
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Terms in this set (45)
Sherman Act
Every contract in restraint of trade is illegal / Any attempt to monopolize is illegal
Clayton Act
Illegal to use if it attempts to monopolize
-Price discrimination
-Exclusive dealing
-Tying contracts
-The acquisition of competing companies stock if the acquisition reduces competition
Federal Trade Commission Act
Declares unfair acts and aggressive competition illegal
Robinson Patman Act
Prohibits suppliers from offering special discounts to large chain stores unless they also offer it to everyone else
Wheeler-Lea Act
Allows the Federal Trade Commission to deal with false and deceptive acts like false advertising
Celler-Kefauver Act
Closes loophole in Clayton Act banning mergers that occur as a result of one company gaining physical assets of another company
Horizontal Merger
A merger between firms selling similar products in the same market / most likely to change the degree of competition
Vertical Merger
A merger between companies in the same industry but at different stages of the production process
Conglomerate Merger
A merger between companies in different industries
3 Theories of Regulation
1. Capture Theory
2. Public Interest Theory
3. Public Choice Theory
Capture Theory of Regulation
No matter the motive for the establishment of the regulation industry, eventually the agency will be captured by the industry being regulated
3 Ways to Regulate a Natural Monopoly
1. Price regulation
2. Profit regulation
3. Output regulation
Price Regulation
To set a price for the natural monopoly firm that equals its marginal cost at the quantity of output at which demand intersects marginal cost
Profit Regulation
...
Output Regulation
...
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Verified questions
ECONOMICS
Tina Dennis is the comptroller for Meek Industries. She believes that the current cashflow problem at Meek is due to the slow collection of accounts receivable. She believes that more than 60 percent of the accounts are in arrears more than three months. A random sample of 200 accounts showed that 140 were more than three months old. At the .01 significance level, can she conclude that more than 60 percent of the accounts are in arrears for more than three months?
ECONOMICS
Describe the characteristics that make the U.S. economy a "modified free enterprise" economy.
ECONOMICS
A large pharmaceutical company hires business administration graduates to sell its products.The company is growing rapidly and dedicates only one day of sales training for new salespeople.The company’s goal for new salespeople is $10,000 per month.The goal is based on the current mean sales for the entire company, which is$10,000 per month. After reviewing the retention rates of new employees, the company finds that only 1 in 10 new employees stays longer than three months. Comment on using the current mean sales per month as a sales goal for new employees. Why do new employees leave the company?
ECONOMICS
A powerful monopoly is broken up into several smaller, competing companies. What are the costs and benefits for the general public?
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