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Monopoly: Strategies and Antitrust
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Why Monopolies Arise Barriers to entry ( ownership of key resource, cost advantage, know-how, reputation, patent, brand name, entry deterrent strategies) Anticompetitive Behavior Natural Monopoly Regulated Monopoly
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Monopolies Strategies Maintain/enhance barriers to entry Reduce elasticity of demand Anticompetitive Behavior
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Entry Deterrent Strategy: Raise Costs Pilot certification
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Entry Deterrent Strategy: Raise Costs Computer/Telecom peripherals
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Antitrust Laws Re. Anticompetitive Monopolistic Behavior Attempts to monopolize markets Cartel behavior: cooperation among competitors to: Merger Guidelines Fix quantities Fix prices Divide markets
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Antitrust Cases Attempt to monopolize Price Fixing Mergers Cable television: AT&T, Comcast Satellite television: DirecTV, Echostar MicrosoftIntel RocheRhone Poulenc BASFTakeda
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Media Mergers http://www.newscorp.com/ ? AOL-Time Warner NewsCorp Sky
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Mergers: Efficiency Gain vs. Dead Weight Loss Pc Pm Demand MR Qm Mc Qc Efficiency gain DWL Price Quantity/t
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