1. As this chapter explains, a monopoly is an industry structure in which only one firm provides a good or service that has no close substitutes. This question explores the last part of this definition further.

a. At one time Sirius Satellite Radio and XM Satellite Radio were the only two satellite radio providers in the United States. The Department of Justice and the Federal Communications Commission approved the merger of the two companies in 2008 even though Sirius-XM would then control 100 percent of the satellite radio market. How do you think the two companies convinced the Department of Justice and the Federal Communications Commission to allow the merger to proceed?

b. In 1947, the U.S. government charged the DuPont Company with a violation of the Sherman Act. The government argued that DuPont was monopolizing the cellophane market. At trial, the government showed that DuPont produced nearly 75 percent of all cellophane sold in the United States each year. Nonetheless, the U.S. Supreme Court ruled in favor of DuPont and dismissed the case. How do you think DuPont convinced the Supreme Court that it had not violated the Sherman Act?