Which of the following is necessarily a problem with antitrust laws?
A)They may target a business whose practices appear to be anti-competitive but in fact have legitimate purposes.
B)They may encourage firms to collude and reduce social welfare compared to the unregulated market.
C)They reduce the effectiveness of the market to self-regulate.
D)They are enforced by agencies whose self-interest contradicts the interests of society as a whole.

Question

Quizplus · Accepted Answer

Antitrust laws do have a necessary role to play in regulating competition in the marketplace, but one of the problems with such laws is that they may potentially target businesses that have legitimate reasons for their practices. For example, a company may have a large market share because they offer superior products or services, not because they engage in anti-competitive behavior. In such cases, antitrust laws may actually harm consumer welfare rather than protect it.

Which of the Following Is Necessarily a Problem with Antitrust