Are Antitrust Laws Good Or Bad?
Driven by the potential to create profits and to survive in a highly competitive industry, rival firms have to continuously strive to be innovative to attract and keep customers.
# Are monopolies bad? Antitrust laws good or bad? – topic
# I’m arguing that monopolies are bad. Antitrust good.
# Briefly describing monopoly vs competitive market
Monopolies are characterized as a single firm or group of firms that are the sole suppliers of a good or service for which there are no close substitutes. Natural and legal barriers to entry such as economies of scale, control of scarce resources and intellectual property rights make it impossible for other firms to enter the industry and/or extremely costly because of the substantial investment costs …show more content…
There are no significant barriers to entry in an industry where rival firms compete with a large number of firms, producing similar product and each fighting to carve their own little niche in the market.
# Argument 1. Monopolies have no incentive to cut costs and develop new products
Without competition, what incentives are there for monopolists to cut costs and develop new products? Lack of competition allows monopoly firms like De Beers, a diamond monopoly, to abuse their monopoly power by restricting their output and charging a higher price for their product than they likely would have if they were in a more competitive market.
Antitrust laws seek to protect consumers from firms attempting to “capture consumer surplus by engaging in illegal conduct to monopolize a market or by abusing its market power ... and discouraging other firms from engaging in such behaviour” (Winston, 2007). They were created to regulate such anti-competitive behaviour and to give other firms a fair chance to compete for market share so that consumers can receive quality products at reasonable
# Are monopolies bad? Antitrust laws good or bad? – topic
# I’m arguing that monopolies are bad. Antitrust good.
# Briefly describing monopoly vs competitive market
Monopolies are characterized as a single firm or group of firms that are the sole suppliers of a good or service for which there are no close substitutes. Natural and legal barriers to entry such as economies of scale, control of scarce resources and intellectual property rights make it impossible for other firms to enter the industry and/or extremely costly because of the substantial investment costs …show more content…
There are no significant barriers to entry in an industry where rival firms compete with a large number of firms, producing similar product and each fighting to carve their own little niche in the market.
# Argument 1. Monopolies have no incentive to cut costs and develop new products
Without competition, what incentives are there for monopolists to cut costs and develop new products? Lack of competition allows monopoly firms like De Beers, a diamond monopoly, to abuse their monopoly power by restricting their output and charging a higher price for their product than they likely would have if they were in a more competitive market.
Antitrust laws seek to protect consumers from firms attempting to “capture consumer surplus by engaging in illegal conduct to monopolize a market or by abusing its market power ... and discouraging other firms from engaging in such behaviour” (Winston, 2007). They were created to regulate such anti-competitive behaviour and to give other firms a fair chance to compete for market share so that consumers can receive quality products at reasonable