The Sherman Act and the Clayton Act were passed into law more than 100 years ago. What characteristic of each of these laws enables them to remain applicable in today's modern economy?
What will be an ideal response?
An important characteristic of these two laws is that they are written in very general terms and focus on specific behaviors or practices that firms might engage in that could be construed as detrimental to society. Thus, while the specific characteristics of businesses, including the types of products produced and the inputs that are used, have changed considerably over time, the fundamental objective of businesses, i.e., to make a profit, has not. Certain behaviors businesses might engage in their pursuit of profits are what, in most cases, will trigger the application of the antitrust laws in question.
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Pollution and depletion both occur because of poorly defined property rights
Indicate whether the statement is true or false
Which of the following must exist for a firm to engage in price discrimination?
A) The firm must be able to identify and separate its buyers into different classes, and the low-price buyers cannot resell the product to the high-price buyers. B) The firm must face an inelastic demand. C) The firm must be able to realize economies of scale. D) The firm must have no more than one class of buyer. E) The firm must be a natural monopoly.