Author Question: What is an attempt to monopolize an industry? What will be an ideal ... (Read 32 times)

waynest · **on:** Jun 29, 2018

What is an attempt to monopolize an industry?

What will be an ideal response?

Question 2

Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D1 and S1 (point A). If there is a surplus of motorcycles how will the equilibrium point change?

A) The equilibrium point will move from A to E.
B) The equilibrium point will move from A to B.
C) There will be no change in the equilibrium point.
D) The equilibrium point will move from A to C.

af · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

In theory, attempts to monopolize an industry mean a firm is trying to become a monopoly. In practice, attempts to monopolize an industry are more difficult to define and are a matter of interpretation by the courts. The rule of reason seemed to say that size alone doesn't constitute an attempt to monopolize as in the 1920 U.S. Steel case. But the rule of reason was overturned when size did matter as in the 1945 Alcoa case. Even in more recent cases, it is difficult to predict what the court will define as an attempt to monopolize. Decisions continue to be divided in this area of the law.

Answer to Question 2

C