...The Clayton Act and the Sherman Act worked together to improve business practices. The Clayton Act helped with various situations within businesses. This Act outlawed price discrimination, exclusive buying contacts, and tying contracts. This Act also outlawed anticompetitive mergers and interlocking directorates. In the 1912 presidential election, all three parties agreed that Congress was being too nice to corporations with the Sherman Act 1890. The Democratic nominee won the elections and he wanted to strengthen the antitrust laws so they created the Clayton Act 1914 to replace existing laws. With price discrimination, it prevents companies from participating in predatory lending which might lower competition or create a monopoly company....
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...and customers, between manufacturers and distributors, or between distributors and retailers. An experienced antitrust attorney who stays abreast of current developments in joint venture policy should be able to advise the organization on how to avoid antitrust problems. The Sherman Anti-Trust Act is the basic federal antitrust statute. It prohibits...
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...Evolution of Statutes Io protect trade and commerce against unlawful restraints and monopolies in the United Stated two very compelling acts passed by the federal government. In 1890 the Sherman Antitrust Act was established to make it illegal for companies to strive to establish a monopoly on a product or service, or form cartels ("Sherman Antitrust Act," n.d.). In 1914 the Clayton Act was passed, to give clarification to the Sherman Antitrust Act, The Clayton Antitrust Act tries to exclude certain actions such as price discrimination, price fixing and unfair business practices that can lead to anti-competitiveness in the marketplace. The Sherman Antitrust Act will be amended more than once over the follow decades to keep up with the...
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...Assignment The Sherman and Clayton Acts Click Link Below To Buy: http://hwcampus.com/shop/assignment-sherman-clayton-acts/ 1. The Sherman and Clayton Acts The Clayton Act of 1914 classifies several business practices as illegal, including price discrimination and tying contracts, if they "substantially lessen competition or tend to create a monopoly." The Clayton Act of 1914 is an example of which of the following? Antitrust laws Price regulations 2. The Clayton and Celler-Kefauver Acts Which of the following activities are prohibited by the Clayton Act when they lead to less competition? A buyer is forced to buy multiple products from a producer in order to get a desired product. Each of these answers is correct. A director from one business sits on the board of a competing firm. A firm acquires a major percentage of the stocks of a competing firm. 3. The Herfindahl index Suppose that three firms make up the entire wig manufacturing industry. One has a 40% market share, and the other two have a 30% market share each. The Herfindahl index of this industry is _________ (a.10,000 b.6,000 c.3,400 d.4,000 e.3,000). A new firm, Mane Attraction, enters the wig manufacturing industry and immediately captures a 15% share of the market. This would cause the Herfindahl index for the industry to ___________ (a.fall b.rise c.remain the same). The largest possible value of the Herfindahl index is 10,000 because: An industry with an index higher than 10...
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...Assignment The Sherman and Clayton Acts Click Link Below To Buy: http://hwcampus.com/shop/assignment-sherman-clayton-acts/ 1. The Sherman and Clayton Acts The Clayton Act of 1914 classifies several business practices as illegal, including price discrimination and tying contracts, if they "substantially lessen competition or tend to create a monopoly." The Clayton Act of 1914 is an example of which of the following? Antitrust laws Price regulations 2. The Clayton and Celler-Kefauver Acts Which of the following activities are prohibited by the Clayton Act when they lead to less competition? A buyer is forced to buy multiple products from a producer in order to get a desired product. Each of these answers is correct. A director from one business sits on the board of a competing firm. A firm acquires a major percentage of the stocks of a competing firm. 3. The Herfindahl index Suppose that three firms make up the entire wig manufacturing industry. One has a 40% market share, and the other two have a 30% market share each. The Herfindahl index of this industry is _________ (a.10,000 b.6,000 c.3,400 d.4,000 e.3,000). A new firm, Mane Attraction, enters the wig manufacturing industry and immediately captures a 15% share of the market. This would cause the Herfindahl index for the industry to ___________ (a.fall b.rise c.remain the same). The largest possible value of the Herfindahl index is 10,000 because: An industry with an index higher than 10...
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...Question 1 0.5 out of 0.5 points A restraint of trade is an agreement between firms that has the effect of reducing competition in the marketplace. Selected Answer: Correct True Correct Answer: Correct True Question 2 0 out of 0.5 points When applying the rule of reason to determine whether an agreement violates Section 1 of the Sherman Act, a court will not consider Selected Answer: Incorrect the parties' market ability to implement the agreement. Correct Answer: Correct the effect of the agreement on international trade. Question 3 0 out of 0.5 points An act must substantially affect interstate commerce to violate antitrust law. Selected Answer: Incorrect False Correct Answer: Correct True Question 4 0.5 out of 0.5 points Gulf Air, Inc., is the major wholesale distributor of software in the state of Florida. Its closest competitor is Fluid Systems Company, another Florida firm. The two firms agree that Gulf Air will operate in south Florida and Fluid Systems will operate in north Florida. This is Selected Answer: Correct a market division. Correct Answer: Correct a market division. Question 5 0 out of 0.5 points Edgy Engine Components, Inc., a maker of vehicle parts, refuses to sell to Fidgety Fix-It, Inc., a national vehicle service firm. Edgy Engine convinces Greasy Motor Parts Company, a competitor, to do the same. This is Selected Answer: Incorrect a market division. Correct Answer: Correct a group boycott. Question 6 0.5 out...
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...temporarily to force their competitors to either sell to Standard Oil or close their business. They purchased the equipment needed to make oil barrels so that their competitors could not get their oil to their customers. They used thugs and threats of violence against those that refused to bend to their demands. And finally, their attitude and lack of cooperation towards the government intervention alongside the widespread disgust and revulsion by the public led Standard Oil to be charged under the Sherman Anti-Trust Act (Kopel & Bast., 2001). Some of the pecuniary and nonpecuniary costs included closing of businesses, monopoly pricing of oil and the refined products, higher unemployment, and lower competition. Standard Oil could control the output of oil and thereby affecting businesses that were not even directly involved in the oil business. And by using thugs and physical violence, the loss of physical items and/or hospitalization of people increased (“The Sherman,” 2008) This Act authorized the Federal Government to eliminate trusts. In1911, after years of legal...
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...practices. However, with competition came regulation for business and trade. A Competitive America As Americans we love to compete. Therefore it is no wonder that the United States economy is based on competition. Promoting competition is accepted as the best way to promote consumer well-being. America’s anti-trust laws have been in place for more than 100 years, since the Industrialization of America protecting the consumer’s rights. However, more countries have passed anti-trust laws in the past 20 years. America’s anti-trust laws were passed to focus on anti-competitive practices. Americans have long loved free market system and the competition that it fosters. Competition among businesses has been regulated by anti-trust acts recently; however they help to maintain a fair and equitable system where the small business is able to compete with the big business. The anti-trust laws enable the consumer to purchase a quality product at an affordable price due to the competitive market that it sets in place between the businesses. Anti-trust laws are needed to continually handle the companies that would be dishonest in business practices if not for regulations and rules....
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...that starting with the Sherman Act of 1890, a number of antitrust laws were passed to prevent monopoly or undue concentration of economic power, protect the public against the abuses and inefficiencies resulting from monopoly or the concentration of economic power and maintain a workable degree of competition in the U.S. economy. First, lets discuss regulations and the ways that government has been able to restrict competition. Government regulation has four main purposes, preventing abuses, protecting consumers, limiting negative externalities and promoting competition. These regulations includes things like licensing, restrictions on price competition, as well as patents. Regulations will also help ensure economic stability by keeping the unemployment rate low as well as keeping the inflation rate low. A license is often required for a business just to operate and remain open. A business such as TV, radio stations, child care services; professions like medicine and law; and trades such as plumbers, electricians and real estate brokers as well as dietitians and taxi cab drivers all need a license in order to operate. The government requires license of these businesses and professions in order to protect the public against things like fraud and harm. The government also has restrictions on price competition in order to guarantee parity in pricing in areas such as trucking rates, agriculture, shipping rates and airline fares. The Robinson-Patman Act was enacted in 1936...
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...its search power to drive traffic to its own properties over rival sites and services. After a nearly twenty month high-profile investigation, the federal government announced on January 3, 2013, that its dropping an “exhaustive” probe into Google as it found no evidence the company was abusing its search power. Google was investigated under violating the Sherman antitrust act. “The definitive antitrust statute, passed by Congress in 1890, that prohibits monopolies or unreasonable combinations of companies to restrict or in any way control interstate commerce. Specifically outlawed is two or more persons engaging in monopolistic practices, such as price fixing, although it does not outlaw price-fixing per se. It was amended in 1914 by the Clayton Act, which outlaws interlocking directorates and deals with acquisitions that aim to restrain or eliminate competition. (Your Dictionary Law)” “For example, one element of a duty-to-deal claim under the Sherman Act is proving that Google’s treatment of rival websites harms consumers; even the cleverest economist would be stumped with that assignment. (Singer, 2012)” The Sherman Act prohibits monopolies, attempts to monopolize, or conspiracies to monopolize. A monopoly is a form of market structure where only one or very few companies dominate the total sales of a particular product or service, such as Google. A big competitor is Yahoo. The public suffers under a monopolistic market because it does not have...
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...antitrust law is a collection of federal and state government laws, which regulates the conduct and organization of business corporations, generally to promote fair competition for the benefit of consumers. The four major pieces of legislation known as the Antitrust Laws include: The Sherman Act, The Clayton Antitrust Act, The Federal Trade Commission, and the Celler-Kefauver Act. The Sherman Act was created in 1890 had two major provisions which was to prohibit conspiracies to restrain trade and also to outlaw monopolization. In 1914 the Clayton Act was passed to expand off of the Sherman Act. The Clayton Act strengthened the Sherman Act in several ways: price discrimination, typing contracts, acquisition, and interlocking directorates. In 1914, the Federal Trade Commission Act (FTC) was created to enforce antitrust laws and the Clayton Act in particular. The FTC investigates unfair competitive practices and when appropriate issues cease-and desist orders. In 1950 the Celler-Kefauver Act was created to close the loophole the was left available from the Clayton Act’s Section 7. This clause was put in place to stop a firm from acquiring stocks in a competitive firm in order to merge. The Celler-Kefauver Act closed that loophole in order to prevent any firm from reducing the competition. (McConnell 375) B. Discuss the intended purpose of industrial regulation as it applies to the following market structures: An oligopoly is a market form in which a market or industry is dominated...
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...to intervene with the introduction of antitrust legislation (McConnell, 2011, p. 375). The first of the major antitrust laws was the Sherman Act of 1890. The Sherman Act served two purposes. First it outlawed restraints on trade. This made it illegal for trusts to work together setting prices or dividing markets. The goal was to end collusion that would cause economic gain for the parties involved and harm the consumer. The second part of the law outlawed monopolization. The act gave the courts the power to financially penalize and potentially imprison offenders, as well as the ability to break up the monopolies (McConnell, 2011, p. 375). The Sherman act was a good start, but was too ambiguous and didn’t achieve the goals it was intended for. The Clayton Act of 1914 expanded upon its framework. Where the Sherman Act was aimed at eliminating current monopolies, the Clayton Act served to prevent new monopolies from organizing. It had several sections that made illegal the acts of price discrimination and the tying of contracts. It also mad it unlawful for a corporation to acquire stock of a competing corporation in an effort to reduce competition. In the same vein it prevented directors from one firm from also serving in a post in a rival firm (McConnell, 2011, p. 376). The same year saw the passing of the Federal Trade Commission Act of 1914. This created the Federal Trade Commission. The FTC serves as an enforcer of antitrust...
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...18. May 2012 Final Journal Topic: Monopoly and Antitrust The market power of either buyers or sellers, harms buyers who may have the opportunity to buy at competitive prices. It also reduces the production, which causes a deadweight loss. Excessive market power also raises issues of equity and justice, because if a company has too much monopoly power, it makes profit at the expense of consumers. A monopoly is a situation in which there is a single supplier or seller of a good or service for which there are no close substitutes. Economists and others have long known that unregulated monopolies tend to damage the economy by (1) charging higher prices, (2) providing inferior goods and services and (3) suppressing innovation, as compared with a competitive situation (i.e., the existence of numerous, competing suppliers of the good or service).[1] In theory, the Government or State could collect the excess profits that the company obtained through taxes and then redistribute it among the buyers of the product. However, this redistribution is usually not feasible. It is difficult to ascertain what proportion of the profits of an enterprise is attributable to monopoly power and it is even more difficult to locate all buyers and reimburse them an amount proportional to their purchases. How can society, then, limit the market power and prevent the anti-competitively use of it? In the case of a natural monopoly, i.e. an electricity/power...
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...the four major pieces of legislation collectively known as the Antitrust Laws. The four pieces of legislation known as the Antitrust Laws are the Sherman Act of 1890, Clayton Act of 1914, The Federal Trade Commission Act of 1914, and the Celler-Kefauver Act of 1950. The Sherman Act was put into place to stop any price fixing or anything illegal for a company to become so big that it dominated in its area so there couldn’t be any competition. The Act was written and to the point, but in the end failed to live up to its intent. In 1914, The Clayton Act was written to add on to the Sherman Act and make it more stable. By doing this the government could fight against monopolies better. The Clayton Act got rid of price discrimination, tying contracts, stock acquisitions, and it did not allow people to participate in cross directorships, meaning a person couldn’t be part of two competing companies. The Federal Trade Commission Act of 1914 was made up of 5 people to enforce the antitrust laws. They are able to investigate any wrong doings and report them to the U.S. Justice Department. The Celler-Kefauver Act of 1950 is an amendment to the Clayton Act. It was found that even though the Clayton Act improved on the Sherman Act there were still loopholes that companies could use to stay out of trouble. With the Celler-Kefauver Act amendment it stops competing firms from merging by stating that one company cannot get the physical assets of the other company. B. Discuss the...
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...model is unsuitable as a benchmark. Antitrust Laws Promote a competitive economy by prohibiting actions that restrain, or are likely to restrain, competition and by restricting the forms of market structure that are allowable. Limit the activities of firms that have legally obtained monopoly power. Intended to provide a general statutory framework to give the Justice Department, the FTC, and the courts wide discretion in interpreting and applying them. The Development of Antitrust Laws Trust was a device for pyramiding control over several operating companies. The Sherman Antitrust Act (1890) -- Enforced by the Department of Justice. Trust busting Mainstay of US policy on competition Federal Trade Commission Act (1914) Clayton Act (1914) -- Enforced by the Federal Trade Commission (FTC) Sherman Antitrust Act Passed in 1890 Prohibits contracts, combinations, or conspiracies in restraint of trade. Price fixing. Parallel...
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