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When considering whether to pursue antitrust action against firms, government officials usually consider the effects on consumers. Typically this means the firm is using its

When considering whether to pursue antitrust action against firms, government officials usually consider the effects on consumers. Typically this means the firm is using its market power to raise prices. In doing so, regulators may overlook other costs of market power (such as labor market practices, reduction of consumer choice, reduced business investment, etc.).

  • Should the government consider factors other than prices when determining whether monopolies are harmful? Why or why not? And, if so, what factors should the government consider?
  • If a firm uses its market power to keep wages low, but at the same time offers low prices to consumers, is this trade-off worth it for society? Why or why not?

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