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Please provide examples of cases that relate to price-fixing, unfair practices under the anti-trust law, or cases where companies were subject to scrutiny in the case of mergers and acquisitions for fear of a reduction in competition in the industry

Economics Dec 16, 2020

Please provide examples of cases that relate to price-fixing, unfair practices under the anti-trust law, or cases where companies were subject to scrutiny in the case of mergers and acquisitions for fear of a reduction in competition in the industry. Explain the case in your own words and whether you believe the action taken by the government was warranted or sufficient.

Expert Solution

•   Price fixing :in general, when there is price fixing, then consumers are at the position of worse off. If the market is limited, then there is some deal among the producers. As a result they fix a price, and if they can control the supply, then consumers will be exploited.
The problem of price fixing can be solved :
Make decisions independently.
Avoid discussing future pricing.
Don’t indulge any form of discussion about price change with competitors.

•   Unfair practices under the anti trust law :
Even when Rockefeller’s standard oil earned good amount of profit, it reduced its price by more than 50%, and made the situation worse for its competitors.
Penalty should be imposed to restrict the firms to do malpractices in anti trust laws,

•   Companies were subject to scrutiny in case of mergers and acquisitions
Due to merger of the companies, the merger firm operates like a monopoly. So, it has a tendency to raise price with lowered output. It’s quite difficult for the big firms to merge with small firms. Economies of scale differs among them.
Example : Vodafone idea, Walmart flipkart

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