3. Antitrust laws Cooperation among oligopolies runs counter to the public interest because it leads to underproduction and high prices. In an effort to bring resource allocation closer to the social optimum, public officials attempt to force oligopolies to compete instead of cooperating. Consider the following scenario: Suppose that two American investment banks negotiate a merger agreement because a financial crisis threatens to bankrupt both firms. This merger could potentially be stopped by a lawsuit brought by which of the following American institutions? O The Commerce Department O The Interior Department O The Defense Department O The Justice Department
3. Antitrust laws Cooperation among oligopolies runs counter to the public interest because it leads to underproduction and high prices. In an effort to bring resource allocation closer to the social optimum, public officials attempt to force oligopolies to compete instead of cooperating. Consider the following scenario: Suppose that two American investment banks negotiate a merger agreement because a financial crisis threatens to bankrupt both firms. This merger could potentially be stopped by a lawsuit brought by which of the following American institutions? O The Commerce Department O The Interior Department O The Defense Department O The Justice Department
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Antitrust laws are created by the government for the protection of the consumer from predatory practices of business and for ensuring fair competition.
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