Question

Is the tradiotnal antitrust approach to defining markets and market power is sufficient to identify potential...

Is the tradiotnal antitrust approach to defining markets and market power is sufficient to identify potential anti-competitive concentrations of economic power?

Please write a paragrpah explaning this

Homework Answers

Answer #1

A market always expects that firms in that market must have competition among them so that consumers can enjoy better quality product at competitive price. Once this is done, it gives value to the society. This is the reason why such antitrust approach comes into play, unfair business practices are prohibited. But this is only a theory, finding those unfair practices are very hard to find out. An example could be taken; trade concentration is the ratio of output produced and the number of firms in the market. Basically it shows the market share of largest firms. Suppose CR8 indicates holding the market share of 8 largest firms. Now if those 8 firms are grouped together not to produce goods in higher quality (anti-competition), no one can find it easily unless examined thoroughly.

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