 More supply equals lower prices  Two companies making the same thing would lead to better quality  Government protects competition between businesses to keep prices low

 ONE seller  high prices due to low supply  NO variety

 Utility companies Government watches prices Nearly impossible to have wires for various companies  Patents: exclusive rights to sell a NEW good or service for a specific amount of time

 dominated by a few large companies  Cola wars- owned by Pepsi and Coke  Airline companies Delta American Airlines U.S. Airways  Cereal companies Kelloggs General Mills

ProducersConsumers High Price *Produce more *Increase supply *Buy less *Think before you purchase Low Price *Reduce the supply *May stop making items entirely *Buy more Leads to impulse buying for immediate gratification

 a large corporation made up of many different companies  Can lead to more control of more markets  General Electric is a conglomerate Owns  NBC Television Network  Universal Pictures  GE Aircraft Engines  GE Commercial Finance  GE Consumer Products  GE Industrial Systems  GE Insurance  GE Medical Systems  GE Plastics  GE Power Systems  GE Transportation Systems

 A merger – combining two companies  Vertical Merger: produce different goods or services Example: Paramount Pictures, Blockbuster, CBS  Horizontal Merger: two or more companies with similar product lines  Example: Sprint and Nextel  Nike and Under Armour combined for sportswear  Disney and ABC Merger of Exxon and Mobil

 Congress has the enumerated power to regulate trade  Congress passes antitrust laws to protect competition Sherman Antitrust Act of prevented Standard Oil from owning 90% oil refineries in U.S. Clayton Antitrust Act- companies cannot charge some customers a different price Legislation used to break up AT&T, also used to break up Microsoft Microsoft lost trial and appeal in United States Appeals Court. However, decision has not been enforced.  Federal Trade Commission oversees antitrust law