info needed on Antitrust Law

The intent of antitrust laws is to protect competition. The primary goals of antitrust laws is to prohibit "price fixing," and to stop mergers that would create monopolies. One of the main criticisms of antitrust laws is that they artificially raise prices because they protect inefficient competitors from competition.

thanks for the response.

you mentioned two important points

(1)price fixing
(2)stop mergers that would create monopoly.

could you please explain a real example how these enhance competition ?

info please

It's eliminating price fixing and preventing monopolies that enhances competition.

Price fixing is exactly what it sounds like: instead of having a free market where prices can go both up and down, price fixing is when there are few (or sometimes only one) supplier, so the price is inevitably driven way up, and the few suppliers can set the price at whatever level they like. Even if the market wants to pay less, the price is kept artificially high.

Monopolies go hand in hand with this. A monopoly is when one or a few companies so thoroughly dominate an industry that no one else can get a foothold. Again, prices are inevitably driven up, assuming the companies are selling a product or service that is in demand.

For example, you've seen dozens and dozens of brands of toothpaste at the supermarket. All sorts of benefits, all sorts of flavors, all sorts of purposes. This includes stuff for kids and organic stuff, and even toothpaste for pets in very big markets. Now imagine only one company making toothpaste. It's expensive to make a lot of different types of any sort of good, so that company dismantles all of its equipment except the kind used to make their basic flavor: mint. They stop making kids' toothpaste. They don't make organic. They don't make it for pets. It's mint or nothing, no matter how much the public wants it.

Why can the toothpaste manufacturer get away with only making mint? Because the product is in demand (in fact, it may be somewhat necessary for survival, as you can get some nasty infections from advanced periodontal disease) and since they are the only manufacturer they can do whatever they want. So they do. Now, it's not enough for the toothpaste maker to save money by only making mint. Now they start to raise the prices. Eventually, a tiny sample size of toothpaste costs $20 or even more.

Why can the toothpaste maker get away with charging $20 for a sample size? Because they're the only game in town. If you want to keep your teeth, you have to buy from them.

Therefore, because this was starting to happen, the government stepped in, and laws were made to curtail this behavior. What happens when trusts and monopolies are not allowed? A few things:

• Prices generally go down because of competition. Sample sizes go back down to a reasonable price. $20 instead buys you a few large tubes of toothpaste.
  
• Choices run rampant, also because of competition. Instead of just getting mint, you can get orange and cinnamon, etc.
  
• Niche areas become satisfied as the competition seeks a way to distinguish itself. Instead of just seeing adult toothpaste, you see it for kids, or for dogs.
  
• Shortages (usually) go away. Toothpaste isn't made from anything endangered, so this is true, but keep in mind that for something like oil (and yes there is a cartel, but it's international, so US law does not apply) there is a shortage so no matter how much competition there is, that doesn't make more oil. However, with competition there can be more drilling so perhaps more oil would be found.
  
• Innovation happens. While people invent stuff every day of the week, invariably the only things you hear about are the items that become popular. When I was a child, you could get fluoride toothpaste but not with any serious innovations. Now, you can get it to whiten your teeth, or to control tartar, for example. These innovations occurred because competitive companies were looking for a way to distinguish themselves. And it worked.
  
• Small companies can get into the act, and can excel. Let's set aside the toothpaste example for a moment and look at yogurt. Dannon is probably the biggest player in the industry, but there are dozens of others, including smaller players like Stonyfield, which was started in a guy's house (I read about it recently; that's the only reason I know that). If Dannon had been allowed to have a monopoly, Stonyfield would never have succeeded.

I hope this helps.