Question 1

What are three causes of the decline in U.S.antitrust enforcement?

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Question 2

What is the contestable market model?

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Question 3

What standard of judgment was used to decide,and what was the outcome of the following cases:
(1)Standard Oil (1911)
(2)ALCOA (1945)

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Question 4

If the four-firm concentration ratio is 80,what is the highest Herfindahl index that industry could have? What is the lowest?

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Question 5

Given the market share information in the table below,calculate the four firm concentration ratio and the Herfindahl index. $$\begin{array} { | c | c | } 
\hline \text { Firm Number } & \text { Market Share (\%) } \
\hline 1 & 35 \
\hline 2 & 25 \
\hline 3 & 15 \
\hline 4 & 15 \
\hline 5 & 10 \
\hline
\end{array}$$

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Question 6

Use the kinked demand curve diagram to illustrate and describe why prices are often sticky in an oligopoly market.

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Question 7

What are the differences between the ALCOA case and the Standard Oil and American Tobacco cases in terms of the Court's approach to antitrust law?

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Question 8

What is antitrust policy? What does "trust" mean in this context?

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Question 9

Predatory pricing is a pricing strategy by which firms keep their prices low to prevent potential entry by competition.Is it true that all firms that are found pricing their products low are in violation of antitrust policy?

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Question 10

Why have new types of antitrust remedies recently developed?

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Question 11

Explain the difference between the judgment by performance and the judgment by structure methods of assessing competition.

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Question 12

In Industry 1,Firm A,B,C,D and E each has 20 percent of the market.In Industry 2,Firm A has 75 percent of the market,Firm B has 2 percent,Firm C has 2 percent,and Firm D and 20 other firms all have 1 percent each.Which of these two industries do you consider likely to be more competitive,and why?

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Question 13

How,if at all,does the kinked demand curve model contribute to the theory of oligopoly pricing decisions?

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Question 14

What do economists mean by the term "market structure?"

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Question 15

What is the cartel model of oligopoly?

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Question 16

Why was antitrust policy in other countries not as restrictive as in the U.S.and how has increased international competition changed antitrust policy in the United States?

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Question 17

Over time both the judgment by performance and judgment by structure standards have been used in deciding antitrust cases in the U.S.Briefly trace the history of the application of these standards,including references to key cases as appropriate.

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Question 18

How has increased international competition changed antitrust policy in the United States?

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Question 19

(a)For each of the following calculate the four-firm concentration ratio and the Herfindahl index.
Industry 1: 44 firms in the industry.The four largest firms each have a 15% market share,the remaining firms each have a 1% market share.
Industry 2: 7 firms in the industry.The six largest firms each have a 15% market share,the remaining firm has a 10% market share.
(b)Is it possible to state with certainty which industry is more competitive? Explain your answer by using your calculations from (a)in your explanation.

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Question 20

Why,in recent years,have many potential mergers never even proposed? Give three reasons why the government has been lenient in interpreting anti-trust laws.

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Quiz 15: Oligopoly and Antitrust Policy