The Klepper (2002) model may have antitrust implications. For example, during

the shake-out period government anti-trust authorities, often spurred by failing

competitors, often consider anti-trust actions against the surviving firms. Which

factors might caution against aggressive anti-trust action driven by industry

concentration?

a. The analysis shows that the emergence of oligopoly often comes about

"naturally" as a consequence of the superior cost reduction capability

acquired by early entrants through larger R&D investments

b. The advantage of large firms to appropriate the gains from R&D

encourages them to invest more in R&D

c. Breaking up or otherwise restricting the small group of survivors - the

oligopolists- may reduce economic efficiency and lead to higher prices

d. All of the above