What are antitrust laws and how do they protect consumers?

Answer 1

First, a definition of "trust" is in order: a trust is when a group of competing businesses decide that competition isn't all it's cracked up to be, frankly, and cooperate with one another instead to set prices and availablity of their products. This is called "collusion," and it drives up costs and drives down quality. In a "free market," people who see such actions could come in, undercut the trust on price, and win major market share. Unfortunately for free marketeers, the trust members, who are colluding to control prices, remember, slash their prices wherever their new competitor tries to sell his stuff. As a result, the trust loses money on each sale, but, being much larger than the small fry trying to break in, are easily able to absorb the losses by either eating the losses outright, or, more likely, hiking prices elsewhere to cover the difference. Antitrust legislation prevents such behavior, as long as the government is willing to enforce it. Basically, consumers benefit through: * Lower prices * Higher quality * Greater availablity * More innovation Two great online resources for you to check out... http://www.usdoj.gov/atr/public/div_stats/1638.htm The US Department of Justice's Antitrust FAQ is one of the clearest explanations I've ever seen. (Really!) http://www.antitrustinstitute.org/links/misc.cfm The American Antitrust Institute's webpage of links to all sorts of additional information.