Module 23-24

Antitrust policy refers to government:

government to prevent industries such as oligopolies from becoming and/or behaving like monopolies.

The Robinson-Patman Act 1936 (antiprice discrimination act)

intended to prevent price discrimination. However, the law applies only to interstate trade and exempts cooperative associations, businesses owned by producers.

The Federal Trade Commission Act (FTC Act was also passed in 1914)

prevents unfair methods of competition including unfair/deceptive business practices that affect interstate commerce. In addition, the act seeks monetary relief for consumers impacted by such business practices. Furthermore, the act created the FTC, which is responsible for policing violations.

Clayton Antitrust Act

strengthened the Sherman Act prohibiting mergers and acquisitions that would reduce competition. The federal government can challenge such mergers and acquisitions that would cause consumers to pay higher prices. It also prohibits any business practices that lessen competition.

vertical merger

the combination of two or more firms involved in different stages of producing the same good or service

marginal productivity theory of income distribution

the wage rate that you receive should be equal to the value of marginal productivity of labor added

Sherman Antitrust Act (1890)

to break up existing monopolies and prevent the creation of new ones.

Celler-Kefauver Act 1950 (antimerger act)

By closing the loophole that allowed companies to buy individual assets of their competitors, the government was given the power to halt mergers and acquisitions designed to limit competition, specifically vertical mergers.

Antitrust acts include the following:

The Sherman Antitrust Act The Clayton Act The Federal Trade Commission Act The Robinson-Patman Act The Celler-Kefauver Act

wage disparities by gender can also be due to the following reasons:

The number of years of work experience. The number of years in continuous (non-interrupted) employment. The number of hours worked. The different negotiating skills of men and women. Various time constraints placed on mothers. Compensating wage differentials. College major and career choice.

two main objections of marginal productivity theory of income distribution.

There are income disparities not necessarily due to productivity differences in the real world. wage disparities that exist in the real world that do vary by age, gender, and ethnicity.

efficiency wage

an above-market wage that a firm pays to increase workers' productivity