Chapter 11: Monopoly & Antitrust Policy

The table represents the market share of the 10 largest steel producers. Firm/Market Share (%) 1/20.5 2/16.1 3/13.0 4/13.0 5/8 6/7.5 7/6.4 8/5 9/4 10/1 What is the four‑firm concentration ratio for the steel industry represented in the table? Round your answer to the nearest tenth.

62.6%

Which is not a feature of the four‑firm concentration ratio? It only considers firms producing the same product. It is an indicator of the oligopolistic nature of an industry. It only considers goods produced in the United States. The ratio considers differences between the market shares of the top four firms.

The ratio considers differences between the market shares of the top four firms.

The four‑firm concentration ratio is useful for showing a firm's absolute market power. comparing domestic sales to international sales. providing a rough gauge of the distribution of market power in a given market. identifying monopolistic producers.

providing a rough gauge of the distribution of market power in a given market.

What are antitrust laws? Legislation enacted to prevent the encroachment of government into the private sector. Laws governing the management of state-owned enterprises. Laws meant to protect businesses from unfair treatment from consumers. Laws meant to eliminate collusion and promote competition among firms. Identify the first antitrust law and its purpose. The Federal Trade Commission Act of 19141914 established the FTC. The Robinson-Patman Act of 19361936 prohibited anticompetitive price discrimination. The Sherman Act of 19141914 established the Federal Trade Commission. The Sherman Act of 18901890 prohibits price fixing, collusion, and monopolization. The Clayton Act of 18901890 prohibits firms from owning stock in competing firms. The Clayton Act of 19501950 toughened restrictions on mergers by prohibiting any merger that leads toreduced competition.

Laws meant to eliminate collusion and promote competition among firms. The Sherman Act of 18901890 prohibits price fixing, collusion, and monopolization.

Determine whether each of the statements regarding the regulation of mergers in the United States is true or false. true The Department of Justice and the Federal Trade Commission are responsible for approving mergers and enforcing antitrust law.true Market definition is one of the main parts of current merger guidelines.false The Federal Reserve oversees the enforcement of antitrust law.true Measure of concentration is one of the main parts of current merger guidelines.true Mergers that result in a relatively high HHI are less likely to be approved than mergers resulting in a lower HHI.false Firm diversification is one of the main parts of the current merger guidelines.

true The Department of Justice and the Federal Trade Commission are responsible for approving mergers and enforcing antitrust law. true Market definition is one of the main parts of current merger guidelines. false The Federal Reserve oversees the enforcement of antitrust law. true Measure of concentration is one of the main parts of current merger guidelines. true Mergers that result in a relatively high HHI are less likely to be approved than mergers resulting in a lower HHI. false Firm diversification is one of the main parts of the current merger guidelines.