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Homework answers / question archive / What is the purpose of anti-trust legislation? In your answer, be sure to include explicit benefits that can be realized by consumers as a consequence of the enforcement of this legislation
What is the purpose of anti-trust legislation? In your answer, be sure to include explicit benefits that can be realized by consumers as a consequence of the enforcement of this legislation. What are some potential costs (to consumers)?
Problem: What is the purpose of anti-trust legislation? In your answer, be sure to include explicit benefits that can be realized by consumers as a consequence of the enforcement of this legislation. What are some potential costs (to consumers)?
"The purpose behind antitrust law is to keep markets competitive so that businesses and ultimately consumers can purchase the best possible goods and services at the lowest possible prices."
http://www.cmht.com/antitrust.php
"In the United States, toward the last part of the nineteenth century, widespread business combinations known as trust agreements existed. These agreements usually involved two or more companies that combined with the purpose of raising prices and lowering output, giving the trustees the power to control competition and maximize profits at the public's expense."
The Clayton Act of 1914 "included (1) forbidding discrimination in price, services, or facilities between customers; (2) determining that antitrust laws were not applicable to labor organizations; (3) prohibiting requirements that customers buy additional items in order to obtain products desired; and (4) making it illegal for one corporation to acquire the stock of another with intention of creating a monopoly."
http://business.enotes.com/business-finance-encyclopedia/antitrust-legislation
Potential costs to consumers may be in the areas that are not covered under anti-trust legislation:
Labor unions
Public utilities - electric, gas, and telephone companies
Professional baseball
Cooperative activities among U.S. exporters
Hospitals
Public transit and water systems
Suppliers of military equipment
Joint publishing arrangements in a single city by two or more newspapers
And there are those who think that a free markets will take care of themselves without governmental interference. http://en.wikipedia.org/wiki/Antitrust
Not mentioned is the huge cost of enforcement (many government employees) plus the cost of lengthy litigation.
There are also those who think the anti-trust rules don't apply to our current techno-economy.
http://www.cato.org/dailys/11-13-97.html