5. A BusinessWeek magazine study of mergers and acquisitions between 1990 and 1995 found that 83 percent of these deals achieved, at best, marginal returns, and 50 percent recorded a loss.

a. If such mergers are not especially profitable, why do they occur?

b. U.S. antitrust policy has changed dramatically since the 1960s when the government regularly blocked mergers among companies in the same industry. Today, the federal government is much less active; it allows almost all mergers. Is this new approach justified, or has government just given in to the powers that be?

c. What antitrust policies would work best in today’s U.S. economy?