Antitrust

Among the central concerns of the antitrust laws are market structures, price fixing, and price discrimination. Price discrimination is both a symptom of a noncompetitive market and a further distortion of economic knowledge, as it conveys different information about the relative scarcity of the same product to different users.

But the problem is that (1)sometimes it is hard to articulate the characteristics of a certain product and judge whether it is a monopoly product or not.

(2)Even where the physical demarcation (划界) of a product seems obvious and unambiguous, its economic demarcation may ne difficult or impossible. That is, if you dominate orange market and charge high price on orange, customers can switch to other kinds of fruits. Think about the substitutes and elasticity. The extent to which the price of one product affects the sales of another product is what is economically important.


There are two fairly obvious alternative explanations of why one firm or a few firms sell the bulk of the output in a given industry.

(1)They in some way exercise "control" over others--either by being able to exclude potential competitors or by intimidating them from competitive pricing by threats to ruin them financially.

(2) Firms differ in efficiency--whether in production, in the quality of the product, in shipping costs, or in the general quality of their respective management.

Those who argue that concentrated industries represent monopolistic control, in some sense, deny production efficiencies, product quality differences or differences in management.


The alternative hypothesis is that some industries are concentrated because some firms' products are simply preferred by consumers. To say that a firm's reputation gives it an advantage--presumably an unfair disadvantage--in competition is to say that consumers economize knowledge by sorting and labeling only to firm level, in cases where a company's history of product reliably makes finer sorting not incrementally worth the cost.