Download Economic Regulation and Antitrust Laws: Terms, Definitions, and Landmark Cases and more Quizzes Microeconomics in PDF only on Docsity! TERM 1 Economic Regulation DEFINITION 1 Includes the regulation and deregulation of prices and quantities, in industries as utilities, airlines, and trucking. TERM 2 Antitrust Laws DEFINITION 2 Breaks a large firm into smaller pieces, to overcome the problems of a monopoly TERM 3 Regulatory Lag DEFINITION 3 Tf economic conditions change, the prices the firm are allowed to charge may not keep pace. TERM 4 Deregulation DEFINITION 4 Fed government removing rules that had restricted competition TERM 5 Hub-And-Spoke Route Systems DEFINITION 5 Under this type of system, an airline sends a great deal of trafic thru its "hubs". TERM 6 Cross-Subsidization DEFINITION 6 Cross subsidization is the practice of charging higher prices to one group of consumers in order to subsidize lower prices for another group. TERM 7 Sherman Act (1890) DEFINITION 7 Makes it illegeal for competing companies to collude to fix prices. Also prevents monopolies or an attempt to monopolize. TERM 8 Northern Security Case of 1904 DEFINITION 8 The Supreme court used the Sherman Act so 2 railroads could not merge. TERM 9 American Tobacco Case DEFINITION 9 A few weeks after the standard oil case the supreme court decided to break James B Dukes Tobacco Trust into 16 smaller companies. TERM 10 Standard Oil Case DEFINITION 10 Supreme court broke John D. Rockefeller's Standard Oil Trust into 33 different companies. TERM 21 U.S Steel Case DEFINITION 21 1920 the Supreme court ruled that the US Steel had not acted badly (monopolistic wise) therefore the rule of reason was created. TERM 22 Rule of Reason DEFINITION 22 A firm will not be found guilty unless it had behaved in an unreasonable way. TERM 23 ALCOA Case (1945) DEFINITION 23 Rule of reason was dramatically reversed. TERM 24 Brown Shoe Case (1962) DEFINITION 24 A merger with two shoe companies (Brown and Kinney) that when combined would have had less than 4% of the shoe retailing market. The supreme court stopped the merger. TERM 25 Von's Grocery Case DEFINITION 25 Court ruled againt a merger between 2 grocery stores (Von's Grocery Store and Shopping Bag Food Stores) although the combined market share only would have been about 7.5%. TERM 26 IBM Case DEFINITION 26 The gov't charged International Business Machines Corp with a # of anti-competitive prices. TERM 27 Consent Decrees DEFINITION 27 negotiated settlements between the govt and a company. TERM 28 Xerox Case DEFINITION 28 case ended in 1975 with a consent decree, under which Xerox Corp agreed to license its photocopying patents to its competitors. TERM 29 AT&T Case (1982) DEFINITION 29 One of the most famous antitrust cases in recent years. The decree which went in effect in 1984 required AT&T to divest itself of its local telephone operating companies. AT&T still dominated long distance service but in terms of local service it fell to other smaller phone companies. TERM 30 Microsoft Case DEFINITION 30 Microsoft was violating antitrust laws. Microsoft used its near- monopoly in the market for personal cpu operating systems as a means for creating market power in other markets, such as internet browsing software. Judge Thomas Jackson ruled to split icrosoft into 2 companies BUT the Appeals court threw out the order and gave the case to another judge. Microsoft ended up not having any actions against them.
