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    purpose of anti-trust legislation

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    What is the purpose of anti-trust legislation? In your answer, be sure to include explicit benefits that can be realized by consumers as a consequence of the enforcement of this legislation. What are some potential costs (to consumers)?

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    The most basic problem with monopolies is that they have the power to restrict output in order to increase their profits. The free market provides producers with the value of their product to society through the price mechanism. In a competitive market, the socially efficient amount of each good is produced when firms equate marginal revenue with price. This is the socially efficient amount of each good, where social happiness is maximized. Using resources to produce any other type of good would create a less desirable outcome. When output of this most desired good is ...

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    This solution discusses the purpose of the anti-trust legislation.