...Week 3 Research Paper DeVry University The United States has several laws that are intended to further fair, balanced, and competitive business practices. Do you think that such laws are effective? If so, why? If not, why not? Be sure to provide evidence to support your position one way or the other. Before the late 1800’s there were no laws to protect consumers and the process of competition. Often times, the consumers and the well being of all were not taken into consideration before these antitrust laws were put into act. The business owners were more often than less, only looking to make a profit no matter what that took. Thankfully, in 1890 Congress passed the first antitrust law, the Sherman Act as a “comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade.” This law states that, “This Act outlaws all contracts, combinations, and conspiracies that unreasonably restrain interstate and foreign trade. This includes agreements among competitors to fix prices, rig bids, and allocate customers, which are punishable as criminal felonies.” (www.ourdocuments.gov/, 2014) A law designed to restore competition and free enterprise by breaking up monopolies. The original intention of the Sherman Antitrust Act was to protect consumers from big businesses that were using unscrupulous means to raise prices artificially, such as intentionally producing too few goods to meet consumer demand and thereby driving up the products'...
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...I have chosen to write on antitrust laws. Antitrust laws enable a free market to thrive and flourish without the fear of monopolization. Monopolization in itself isn’t a bad thing. There are naturally occurring monopolies like public utilities and when a firm is the only producer of a particular good or service. This single firm or company because the scale of economies is so large that they can supply the entire market at a lower cost than any other competing firm could. Monopolies become a problem when a firm or corporation is the only producer selling a particular good or service, this monopoly wills tend to produce fewer products at a high price. This meanwhile is not productive of a free market. The antitrust laws that are in place today came about from the Sherman Act of 1890. This act was created when the public grew resentfully of the trusts that emerged in the 1870’s and 1880’s. The Sherman Act states that “Every contract, combination in the form of a trust or otherwise, or conspiracy, in restraint of trade or commerce among several states, or with foreign nations is declared to be illegal.” This surprising short sentence is the cornerstone for our antitrust laws today. The Sherman Act basically outlawed restraints of trade, meaning anything that would restrain the flow of free trade. This gave a firm foundation for new and current business to enter into the market place; there would be no fear that they would be pushed out of the market either by price-fixing or collusion...
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...Antitrust September 17, 2009 Tonight’s Agenda Role Call Review of Last Week, Current Events Antitrust Case Study: DeBeers Wrap Up Review of Last Week “People of the same trade seldom meet together, even for merriment and division, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” -- Adam Smith “Perfectly Competitive Market” Consumers well-served. Receive goods at lowest price possible. Society able to choose among competing good with maximum efficiency. Firms that do not produce what consumers want at a fair price are quickly eliminated. Highly restrictive model applying stringent standards. Antitrust Perfect competition model is essentially static. Real world markets are extremely dynamic. Perfect competition model is unsuitable as a benchmark. Antitrust Laws Promote a competitive economy by prohibiting actions that restrain, or are likely to restrain, competition and by restricting the forms of market structure that are allowable. Limit the activities of firms that have legally obtained monopoly power. Intended to provide a general statutory framework to give the Justice Department, the FTC, and the courts wide discretion in interpreting and applying them. The Development of Antitrust Laws Trust was a device for pyramiding control over several operating companies. The Sherman Antitrust Act (1890)...
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...Business Laws…Effective or Not? Chamberlain College of Nursing BUSN115 Introduction to Business and Technology Professor Tammy Lewis Spring, 2014 Business Laws…Effective or Not? The question this week that we are discussing is that the United States has several laws that are intended to further fair, balanced, and competitive business practices. Are such laws effective? If not, why? There are several laws in place such as the Sherman Antitrust Act, the Clayton Antitrust Act and the Federal Trade Commission Act. Anti-Trust laws limit what businesses can and cannot do to ensure that all competitors have an equal chance of succeeding. (Bovee and Thill p. 39). We will discuss each of these laws throughout the paper and hopefully answer the question that was originally asked. The United States laws that are in place currently are typical effective as control measures to ensure fair business practices are followed. Determining the success or failure of specific legislation or regulations can be relative to what angle you are looking from. With anti-trust laws we are insured safeness from unreasonable trade, price discrimination and unfair and anti-competitive business practices. The Sherman Anti-Trust Act In 1890, Congress enacted the Sherman Anti-Trust Act, which is a law designed to restore competition and free enterprise by breaking up monopolies. The Act of July 2, 1890 (Sherman Anti-Trust Act) states that: “This Act outlaws all contracts, combinations...
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...International Legal and Ethical Issues in Business Abstract In this assignment, we will review two scenarios of business practices and how these practices influence consumers. We will also explore antitrust laws and the fact that they were established to protect consumers and businesses from anti-competitive business practices. The foundation of a dynamic economy is free and open trade. The benefits of lower prices and higher quality products or services is done through aggressive competition. To maintain this dynamic economy the United States Congress established and passed the first antitrust law. This law was named the Sherman Act of 1890. Two other antitrust laws have been passed since. In 1914 the Federal Trade Commission Act was created by the Federal Trade Commission and the Clayton Act. These laws are still in effect. The antitrust laws were created to promote competition that is dynamic and to protect consumers from mergers that would create anticompetitive business practices. These laws are enforced by the Federal Trade Commission working with the Bureau of Economics. (Guide to Antitrust Laws, 2015) The Sherman Act banishes any monopolization or attempts thereof. The Supreme Court decided long ago that this act doesn't prohibit every restraint of trade. I only prohibits those that are unreasonable. For example, two people that may want to form a partnership may restrain trade but this is not considered unreasonable. Examples of illegal...
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...Environmental Problem: Defined The environmental issue that my research will focus on is the continued use of fossil fuels as the primary energy source by our global economy: regardless of the proven adverse impacts, from our reliance on these nonrenewable resources; and in consideration of the circumstances regarding the existence of viable alternative sources of energy, given the application of equivalent technologies applied to their systems of conversion. The focus of this paper is not to identify evidence of the negative impacts realized because of fossil fuel use, in order to prove these problems are in fact produced. Confirmation has been granted through several other research projects, in regards to those problems and aspects included within the scope of this research project. As for those problems or related aspects excluded in the scope of this project, debate does exists; along with there being variations present in the range of impacts believed to be associated with fossil fuel use. That is, the limits of my research were configured according to the impacts that are evident regardless of opposing viewpoints and variations in perspective. The study will not include research that supports that viable alternative, renewable energy sources are available either. This would be redundant as well considering the practical applications in use throughout the world, diverting any debate that may exist to the alternative sources in theory. Specifically, the three main impacts...
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...Chapter 8 Producer and Consumer Surplus consumer surplus — the value the consumer gets from buying a product less its price. producer surplus — the price the producer sells a product for less the cost of producing it. Burden of Taxation A tax paid by the supplier shifts the supply curve up by the amount of the tax. The loss of consumer and producer surplus from a tax is known as deadweight loss . Deadweight loss is shown graphically by the welfare loss triangle — a geometric representation of the welfare cost in terms of misallocated resources caused by a deviation from a supply/demand equilibrium. The cost of taxation includes the direct cost of revenue paid, lost surplus, and administrative cost. Interestingly, in terms of aesthetics, people have come to like the style of Paris roofs; it is one of the many things that makes Paris distinct. Including aesthetics complicates the analysis enormously. Economic reasoning is based on the architectural view that form follows function. Who Bears the Burden of a Tax? Taxes are like hot potatoes: Everyone wants to pass them on to someone else. Nobody wants to pay taxes, and there are usually large political fights about whom government should tax. For example, should the Social Security tax (mandated by the Federal Insurance Contributions Act, or FICA) be placed on workers or on the company that hires them? The supply/demand framework gives an unexpected answer to this question. Burden Depends on Relative Elasticity ...
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...18. May 2012 Final Journal Topic: Monopoly and Antitrust The market power of either buyers or sellers, harms buyers who may have the opportunity to buy at competitive prices. It also reduces the production, which causes a deadweight loss. Excessive market power also raises issues of equity and justice, because if a company has too much monopoly power, it makes profit at the expense of consumers. A monopoly is a situation in which there is a single supplier or seller of a good or service for which there are no close substitutes. Economists and others have long known that unregulated monopolies tend to damage the economy by (1) charging higher prices, (2) providing inferior goods and services and (3) suppressing innovation, as compared with a competitive situation (i.e., the existence of numerous, competing suppliers of the good or service).[1] In theory, the Government or State could collect the excess profits that the company obtained through taxes and then redistribute it among the buyers of the product. However, this redistribution is usually not feasible. It is difficult to ascertain what proportion of the profits of an enterprise is attributable to monopoly power and it is even more difficult to locate all buyers and reimburse them an amount proportional to their purchases. How can society, then, limit the market power and prevent the anti-competitively use of it? In the case of a natural monopoly, i.e. an electricity/power...
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...Name: Jane Holman Student Number: 220034259 Unit: MM 302 Assignment: Assignment one - essay Due Date: 20 August 2010 0 Introduction The following report goes into detail about the governments involved in a market economy, the government influences four main areas in the economy which are; enforcing antitrust laws, preserving property rights, providing a stable fiscal and monetary environment and preserving political stability. Also the report will cover why there can never be a truly ‘free market’ economy, where there is absolutely no government intervention. Market Economy In a market economy, the majority of a nation’s land, factories, and other economic resources are privately owned, either by individuals or businesses (Wild, Wild & Han 2010:151). It is also an economy in which prices of goods and services are freely set based on the laws of supply and demand which are unfettered by interference from a government or other outside bodies. A market economy at its basic is an economy run entirely by the market itself (McGuigan 2003:1). In contrast to a market economy is one which follows the Keynesian principals which is an economic theory which advocates government intervention, or demand side management of economy by increasing money supply or by actually buying things on the market itself, they believe that this will achieve full employment and stable prices (Web finance 2010:1). Market economy has come to be accepted as a norm across the world with many developing...
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...Antitrust law is the law of competition, and it is perhaps the least understood law of all. This article provides an overview and explanation of the essential principals of antitrust law, along with comments on certain recurring themes and recent developments in the voluminous case law by which the courts have struggled to give meaning and practical effect to the principal antitrust statutes. What Is Antitrust Law? Broadly speaking, antitrust laws seek to promote fair competition on the merits and to protect consumers and wronged competitor businesses from anti-competitive business practices — practices undertaken in effort to undermine competitive commercial behavior in a given market or line of commerce. The antitrust laws therefore forbid the wrongful acquisition or preservation of monopoly power, the abuse of monopoly power in order to establish a new monopoly, and concerted restraints of trade (i.e., business practices undertaken by two or more firms that improperly stifle or suppress “competition on the merits” in a given market). They also govern proposed mergers and acquisitions that are sufficiently large to constitute a threat to competition, and they address commercial practices that pose an arguable danger to competition on the merits in a properly defined antitrust market. The Principal Antitrust Offenses. Antitrust law is the law of competition. It is concerned with wrongs committed against competition on the merits in a given line of commerce or market. It is...
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...Parties: United States of America: The Plaintiff is the United States which says that the Sherman Antitrust Act has been violated by the defendants. Hilton Hotels Corporation: A defendant that allegedly agreed with other hotels to give preferential treatment to suppliers who paid assessments while decreasing purchases from those companies who refused. Along with its co-defendant, it is accused of bringing the combined economic power of the hotels against the suppliers who failed to pay. Western International Hotels Co.: Another defendant that was accused of violating the Sherman Act’s provisions with its refusals to deal with the unreasonable restraints on trade. Facts: In Portland, Oregon, representatives of hotels, restaurants and other business entities organized an association to attract potential conventions to their respective city. While at the convention, members were asked to make contributions equal to one percent of their sales in order to help finance. To help bolster their collections, hotel members, including the defendant Hilton Hotel Corp., agrees to give preferential treatment to the suppliers who paid their assessments. But for those who did not pay, actions were set in motion to help decrease the purchases from those particular suppliers. Procedure: The court found that the evidence was clearly sufficient to establish that the defendant hotels agreed to prefer suppliers who paid contributions over those who did not. The primary purpose and direct...
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...Business Ethics and Legal Issues Name: Course: Tutor: Date: Abstract Antitrust laws are the legislations by state governments aimed regulating the way in which trade and commerce is carried out. This is possible through the prevention of illegitimate price-fixing and monopolies and facilitating fair completion. The net effect that is felt by the consumer is the production of high quality goods and services at prices that are affordable to all. Additionally, the public welfare and interest are well protected because it ensures that their demand is met by the firms who are engaged in the sale of goods and services. This is achieved by the provision of an ample environment for businesses to experience fair competition resulting in good business practices in all industries in the United States. This is achieved by cultivating the culture and the belief that the economy, the manufacturers, and consumers should mutually benefit from the effects of free and fair trading (Mankiw, 2008, p. 7). In its bid to create fair business environment antitrust laws mostly try to minimize cases of monopolization by various firms which may intend to create it through any possible merging. When firms merge, they reduce the competition within themselves and the net effect is that one company controls the whole industry and makes any decision regarding the prices of the products that it handles. This is where the antitrust laws come in place in order to protect consumers...
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...Business Ethics and Legal Issues Student’s Name: Institutional Affiliation: Abstract Antitrust laws are the legislations by state governments aimed regulating the way in which trade and commerce is carried out. This is possible through the prevention of illegitimate price-fixing and monopolies and facilitating fair completion. The net effect that is felt by the consumer is the production of high quality goods and services at prices that are affordable to all. Additionally, the public welfare and interest are well protected because it ensures that the firms who are engaged in the sale of goods and services meet their demand. This is achieved by the provision of an ample environment for businesses to experience fair competition resulting in good business practices in all industries in the United States. This is achieved by cultivating the culture and the belief that the economy, the manufacturers, and consumers should mutually benefit from the effects of free and fair trading (Mankiw, 2008, p. 7). In its bid to create fair business environment antitrust laws mostly try to minimize cases of monopolization by various firms which may intend to create it through any possible merging. When firms merge, they reduce the competition within themselves and the net effect is that one company controls the whole industry and makes any decision regarding the prices of the products that it handles. This is where the antitrust laws come in place in order to protect consumers from any possible...
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...Management 200 Dawson Study Guide-After Midterm Spring 2014 Extensive List of Concepts: starting Week 7 of the quarter -Civil Law and Litigation What types of evidence is there? What are the rules of evidence? What are the requirements for evidence to be admissible in court? Explain how evidence can be excluded (exclusionary rules) What are the types of privileged evidence? -Torts What is a tort? Name the different types of torts What happened in the McDonalds story discussed in class? Explain Intentional Torts: Battery, Assault, Mental Distress Explain what elements are required for a tort to be negligent What is professional negligence? What are defenses to negligence? Compare and contrast Contributory Negligence and Comparative Negligence What is strict liability? What is products liability? -Contracts What is a contract? What are the types of contracts? Details about executory, enforceable, void, express, implied, and voidable What are requirements of contracts? What happens when a contract is breached? -Real Property What things are considered real property? What is an interest in real estate? Details about fee simple absolute, leasehold, life estate, joint tenants, subsurface interests, above surface interests, easement, and restrictive covenants What is a deed? Details about Statutory Warranty and Quit Claim What is title insurance? What are the types of title insurance? Know the process for buying a house, with a lender, with a contract ...
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...statement in today's business world! Upon reading the book by Richard Shell, the title alone captures the pure essence of how businesses have utilized the legal system to their advantage since the early 1800's. Businesses are formed on a daily basis and can range from a mom and pop sole proprietorship, a big corporate giant to the masses, or a huge conglomerate government business to maintain the laws of the land. Law and business are interrelated and one cannot survive without the other and the glue that binds them together is legal strategy. The legal environment in which businesses operate is becoming more complex and companies must understand the basics of business law if they want to avoid legal entanglements. Situations that present potential legal problems arise everyday in most businesses and owners need to be aware and posture themselves to handle these issues effectively and quickly. There would be pure chaos in today's capitalistic society if there was not a standard way of doing business because business needs are always evolving from decade to decade. Back in the 1800's there were not any class action lawsuits, litigation explosions, securities regulations or antitrust laws. The business arena needs a way to change the rules as it relates to the business environment and maintain healthy competition amongst businesses in the world. Legal strategy is the ammunition used to change the laws as it relates to business. According to the author Shell, laws and legal institutions...
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