Famous Players-Lasky Corporation: Antitrust Practices And Market Power
ANTITRUST PRACTICES AND MARKET POWER
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Antitrust Practices and Market Power
The Famous Players-Lasky Corporation made an acquisition of Paramount Corporation and Bosworth in 1916 in order to monopolize the film and movie industry. The Famous Players-Lasky was investigated for antitrust behaviors since it used it acquired theater to induce exhibitors in accepting determinate vertical restraints like block booking. The antitrust behaviors of the big eight studios were making it extremely hard for other independent and small produce and exhibitors to run their activities in the industry, and were hence forced out in an unfair market competition. The big eight studio included United Artists, Universal, Columbia, Paramount, RKO, Warner, MGM, and Fox. The big eight studios antitrust behaviors were characterized by creating a collusion and hence a market oligopoly was created (Ricard, 2010). The oligopolistic market was made possible by the big eight studios …show more content…
Antitrust behaviors tend to create a barrier to market entry and hence creating a natural monopoly or oligopoly. The firms in the oligopoly are then able to undertake price fixing whenever they want and increase their economic profits (Macgregor, 2012). Monopoly pricing is quite significant in antitrust activities, where the price curve is slopped upwards while trying to maintain or increase the demand curve. The firms were investigated for antitrust behaviors under the Sherman Act which is aimed at preserving unfettered and free competition in any trade activity. The antitrust laws under the Sherman Act proscribes any unlawful business and mergers practices in any industry where the act leave it upon the court to make the decision on which mergers or businesses are legal or illegal all based on the current facts (Macgregor,
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Tutor:
Subject:
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Antitrust Practices and Market Power
The Famous Players-Lasky Corporation made an acquisition of Paramount Corporation and Bosworth in 1916 in order to monopolize the film and movie industry. The Famous Players-Lasky was investigated for antitrust behaviors since it used it acquired theater to induce exhibitors in accepting determinate vertical restraints like block booking. The antitrust behaviors of the big eight studios were making it extremely hard for other independent and small produce and exhibitors to run their activities in the industry, and were hence forced out in an unfair market competition. The big eight studio included United Artists, Universal, Columbia, Paramount, RKO, Warner, MGM, and Fox. The big eight studios antitrust behaviors were characterized by creating a collusion and hence a market oligopoly was created (Ricard, 2010). The oligopolistic market was made possible by the big eight studios …show more content…
Antitrust behaviors tend to create a barrier to market entry and hence creating a natural monopoly or oligopoly. The firms in the oligopoly are then able to undertake price fixing whenever they want and increase their economic profits (Macgregor, 2012). Monopoly pricing is quite significant in antitrust activities, where the price curve is slopped upwards while trying to maintain or increase the demand curve. The firms were investigated for antitrust behaviors under the Sherman Act which is aimed at preserving unfettered and free competition in any trade activity. The antitrust laws under the Sherman Act proscribes any unlawful business and mergers practices in any industry where the act leave it upon the court to make the decision on which mergers or businesses are legal or illegal all based on the current facts (Macgregor,