Why Does the Department of Justice NOT Investigate and Block

question 65

Multiple Choice

Why does the Department of Justice NOT investigate and block the many mergers of large firms that have occurred recently in oligopolistic industries such as the cellular phone industry and the airline industry that obviously lessen competition?

• A) The Department of Justice has no authority to enforce antitrust violations because that authority was given only to the Department of Labor under the Clayton Act.
• B) The Economic Recovery and Reinvestment Act that was passed in 2009 repealed the Clayton Act.
• C) It is difficult for the Department of Justice to determine whether a firm has violated the law as written because antitrust law is complex and cases are hard to prosecute.
• D) In the past,every attempt by the Department of Justice to block a merger between two large firms has failed,so the Department of Justice attempts to block only mergers between small firms.
• E) In 1992,antitrust laws were amended so that they would not apply to nationally important industries such as the cellular phone industry and the airline industry.

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Definitions:

At the Expense of Buyers

A situation where actions or policies favor sellers or another party, leading to disadvantages or costs for buyers.

Cartel Agreement

An agreement among competing firms to control prices or output in a particular market, often resulting in higher prices.

Many Firms

A market condition where there is a large number of sellers, promoting competition and diversity of products.

Different Costs

Various expenditures a business incurs, such as fixed, variable, direct, and indirect costs.