Monopoly and Dominant Firms: Antitrust Economics and Policy Approaches

Abstract

This chapter addresses issues in antitrust economics that related to the exercise of market power by a monopoly or by a dominant firm. We start by presenting the standard textbook treatments of monopoly and the dominant firm and then discuss the non-trivial issues of what constitutes a real-world monopoly (or dominant firm) and how to identify it. With that as a basis, we discuss five categories of antitrust actions that can be used to limit the exercise of market power by a monopoly or dominant firm.