Key Terms
Additional
Robinson-Patman Act (1936)
Free enterprise
A private, consensual system of production and distribution, usually conducted for profit in a competitive environment,
Monopoly
The control or advantage obtained by one supplier or producer over the commercial market within a given region.
Monopoly power
The power of a business to fix prices unilaterally or to exclude competition.
Relevant market has two components
Product/service market AND geographic area. Both are heavily litigated.
Third element
The business must have intent to acquire and use monopoly power.
Intent to monopolize requires all three
1. Predatory or anticompetitive conduct 2.
Restraint on trade
An agreement between two or more businesses intended to eliminate competition, create a monopoly, artificially raise pri
Unreasonable restraint on trade
A restraint that produces a significant anticompetitive effect and therefore violates antitrust laws.
Concerted action
An action planned, arranged, and agreed on by parties acting together to further some scheme or cause.
Horizontal agreements
Between direct competitors (same level of the distribution chain).
Vertical agreements
Between businesses at different places along the distribution chain.
Price fixing
The artificial setting or maintaining of prices at a certain level, contrary to the workings of the free market.
Predatory pricing
A specific form of price fixing where a company lowers prices below cost to drive competitors out of business, then rais
Three elements of predatory pricing
1. The alleged predator is selling products below cost 2.