Vapulah

Excess capacity may be dictated by the technology. If the only efficient way to increase capacity is in plants of relatively large size, a firm will have to maintain some excess capacity or risk being caught short by an unexpected increase in demand.

Excess capacity may also be dictated by marketing considerations. Where distributors’ services are essential to commercial success and manufactures do not integrate forward into distribution, a manufacturer will have to convince distributors to support his product.  Excess capacity will demonstrate a commitment to distributors that the firm that has invested in the capacity is in the market to stay. [Read the rest of this entry...]

Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefore in any district court of the united states in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee.

The original version of the Sherman act contained a similar provision for treble damages under private antitrust legislation. This was superseded by [Read the rest of this entry...]

The federal trade commission act introduces our next topic: the methods by which the antitrust laws are enforced.

The department of justice is charged with the enforcement of the Sherman act and the Clayton act. Fines of up to $ 100,000 and jail terms of up to 3 years are allowed for individuals who violate the Sherman act. Event more important, the department of justice may ask federal courts to issue injunctions to constrain business behavior that violates either of these acts. [Read the rest of this entry...]

The remaining basic piece of U.S. antitrust legislation is the Federal Trade Commission (FTC) act. Section 1 of this act established the independent federal trade commission, with five members.

They are appointed by the president and confirmed by the senate for a term of 7 years. The important part of the FTC act, from the point of view of antitrust policy, is the following:

Section 5(a)(1). Unfair methods of competition in or affecting commerce, and [Read the rest of this entry...]