In order for antitrust laws to raise social welfare, the government must
A)disallow synergy benefits from accruing to monopolists.
B)disallow any mergers from taking place.
C)be able to determine which mergers are desirable and which are not.
D)always attempt to keep markets in their most competitive form.

Question

Quizplus · Accepted Answer

Antitrust laws aim to prevent anti-competitive practices and ensure market competition. For these laws to raise social welfare, the government needs to discern between mergers that are beneficial (e.g., those that lead to efficiencies and innovations that benefit consumers) and those that are harmful (e.g., those that reduce competition and harm consumer interests). This ability allows the government to prevent monopolistic behaviors that can lead to higher prices and lower quality for consumers while permitting mergers that can lead to greater efficiencies and benefits.

In Order for Antitrust Laws to Raise Social Welfare, the Government