Antitrust Laws And Whether Or Not Microsoft Is A Monopoly. Usa V. Microsoft Plus Bibliography

1074 words - 4 pages

For our modern Economy to progress and continue to flourish there must be competition between businesses. With Competition buyers are the boss, the market is their agent and businesses are the servants. A totally different system where a single seller controls the market of a certain product or good is called a monopoly. By controlling the supply of this product a monopolist can charge a higher than competitive price for that item. To prevent this from occurring the United States attempts to regulate or prevent monopolies using antitrust laws.The purposes of antitrust laws are to prevent monopolization, encourage a competitive market, and achieve efficient growth. During the Industrial Revolution due to advances in technology such as railroads, telephone, and electricity we saw Atrusts@ emerge. These trusts were huge conglomerates that sought to monopolize and control their respective industry. To prevent trusts (monopolies) from creating restraints on trade or commerce and reducing competition, the Sherman Antitrust Act was by passed Congress in 1890. to deal with new monopolistic practices, the act contained three distinct types of provisions, covering corporate activities, remedies for reform, and labor disputes. Furthermore the Act was designed to maintain economic liberty, and to eliminate restraints on trade and competition. The Sherman Act is the main source of Antitrust law as we know it today. The Sherman Act had 2 parts:Section I- Every Contract, combination in the form a trust or otherwise, a conspiracy, in restraint of trade or commerce among the several states, or with foreign nations I hereby declared to be illegal.Section II- Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any person or persons, to monopolize any part of the trade or commerce among the several states, or with foreign nations, shall be deemed guilty of a felony.The Sherman act outlawed restraints on trade as well as monopolization of industries or goods .To understand antitrust laws we must understand what a monopoly exactly means. The dictionary meaning states that a Monopoly is economic situation in which only a single seller or producer supplies a commodity or a service. For a monopoly to be effective, there must be no practical substitutes for the product or service sold, and no serious threat of the entry of a competitor into the market. This enables the seller to control the price. Economists have developed a complicated body of theory to explain why the behavior of a monopoly firm differs from that of a competitive firm. A monopoly company, Deals with two issues: a set of demand conditions for the good or service it provides; and a set of cost conditions that regulate how much it has to pay to suppliers of the resources and labor needed to produce its product. Every business firm must adjust its production in order to maximize profit, this is the difference between the revenue it receives from its sales and the costs...

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