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Article Summary Arguing That a Merger Would Lead to Higher Prices, Reduced

question 73

Multiple Choice

Article Summary
Arguing that a merger would lead to higher prices, reduced service, and significantly less competition, the Justice Department and attorneys general from 6 states and the District of Columbia filed a lawsuit in August to challenge the pending merger of American Airlines and US Airways. The lawsuit took some by surprise as the Justice Department has in recent years approved the mergers of Delta with Northwest and United with Continental. The European Union approved the merger in August, and American and US Airways had hoped to complete the merger by September.
Source: Even Perez, "US government seeks to block American-US Airways merger," CNN.com, August 13, 2013.
-Refer to the Article Summary. The standards used by the Department of Justice and the FTC to evaluate a potential merger such as the one between American Airlines and US Airways are based on market concentration as determined by the

Definitions:

Diversifying

The strategy of expanding or varying products, services, or markets to reduce risk and increase potential for growth.

Reduction-In-Force (RIF)

A company strategy involving the decrease of its workforce due to budget cuts, restructuring, or other economic reasons, often leading to layoffs.

Cost-Savings Practice

Actions or strategies implemented by an organization or individuals to reduce expenses and save money without compromising quality or performance.

Recession

A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.