Mergers and Legislation Economics Unit 4

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Presentation transcript:

Mergers and Legislation Economics Unit 4 PowerPoint #3 Mergers and Legislation Economics Unit 4

Essential Questions: Explain the three different types of mergers: conglomerates, vertical, and horizontal. Analyze how the Sherman Antitrust Act and Clayton Act are meant to protect competition in the free market.

Mergers There are three types of mergers: Conglomerates Vertical mergers Horizontal mergers https://www.youtube.com/watch?v=wlLdX0fs6hE WATCH TO 2:30 – skip the rest

Mergers: Conglomerates Conglomerates are the merging of two corporations involved in at least four or more unrelated businesses.

Mergers: Vertical Vertical merger is merging of two corporations in same chain of supply. Pay attention and analyze these two examples of vertical mergers

Mergers: Horizontal Horizontal merger is the merging of two corporations in the same business. Pay attention and analyze these two examples of vertical mergers

Antitrust Legislation Sherman Antitrust Act (1890) prevented new monopolies or trusts from forming and broke up existing ones. https://www.youtube.com/watch?v=_DSN0uUNLOw

Antitrust Legislation Clayton Act (1914) sought to clarify the laws in Sherman Antitrust Act by prohibiting or limiting a specific number of business practices. https://www.youtube.com/watch?v=j4p-PQTDlH0

Antitrust Legislation Federal government must determine whether merging of two companies will significantly lessen competition. Federal Trade Commission https://www.youtube.com/watch?v=NssfPApe5iQ

Essential Questions: Explain the three different types of mergers: conglomerates, vertical, and horizontal. Analyze how the Sherman Antitrust Act and Clayton Act are meant to protect competition in the free market.