The proposed merger between Staples and Office Depot and the FTC's opposition to it underscore the importance of how a market is defined when assessing the amount of market power possessed by an individual firm.

Question

Quizplus · Accepted Answer

The statement is true. The definition of the market is crucial in determining the level of competition and market power possessed by a company. In the case of the proposed merger between Staples and Office Depot, the FTC defined the market narrowly, focusing on office supplies sold to large corporations, which allowed them to conclude that the merger would reduce competition and harm consumers. Had the market been defined more broadly, the analysis might have reached a different conclusion.

The Proposed Merger Between Staples and Office Depot and the FTC's