Solved > 10. Congress Examines Giant Airline Merger Congress examined:1595986 …

10. Congress Examines Giant Airline Merger

Congress examined a proposed merger between Delta Airlines and Northwest Airlines that would discourage competition, reduce service, and result in higher fares. Delta claims that the merger would not limit competition because the carriers primarily serve different geographic regions. Witnesses scheduled to testify before the House Subcommittee were likely to focus on whether the merge would result in lower airfares or reduced competition.

Source: CNN, May 14, 2008

Explain the guidelines that the Federal Trade Commission uses to evaluate mergers and why it might permit or block this merger.

11. AT&T’s New Pricing Takes Smartphones to the Masses

AT&T, the second largest U.S. wireless carrier and only operator offering the iPhone, plans to attract average consumers to sign up for data service by cutting its prices: A $15 a month plan for 200 megabytes of data; $25 a month plan for 2 gigabytes of data. Verizon Wireless, the largest U.S. wireless operator wouldn’t comment on AT&T’s new pricing plans. But if history is any indication, it won’t take long before Verizon, operator of the HTC Incredible, a smartphone that looks very similar to an iPhone, begins offering tiered data service.

Source: Cnet News, June 3, 2010

a. Describe the basis of the competition between AT&T and Verizon.

b. Is AT&T likely to be using predatory pricing?

c. If a price war develops in the market for data services, who benefits most?

12. Starbucks Sued for Trying to Sink Competition

Penny Stafford, owner of the Seattle-based Belvi Coffee and Tea Exchange Inc. filed the lawsuit, which contends that Starbucks exploited its monopoly power. Starbucks used predatory practices such as offering to pay leases that exceeded market value if the building owner would refuse to allow competitors into the same building; having its employees offer free coffee samples in front of her store to lure away customers; and offering to buy out competitors at below-market prices and threatening to open nearby stores if the offer is rejected.

Source: CNN, September 26, 2006

a. Explain how Starbucks is alleged to have violated U.S. antitrust laws in Seattle.

b. Explain why it is unlikely that Starbucks might use predatory pricing to permanently drive out competition.

c. What information would you need that is not provided in the news clip to decide whether Starbucks had practiced predatory pricing?

d. Sketch the situation facing Belvi Coffee and Tea Exchange Inc. when the firm closed. is an online academic writing platform that provides extensive assistance to graduate school students as they work through their research projects, papers and dissertations. gives students access to experienced professionals who can provide the help they need in a timely and efficient manner. The service offers a wide range of services, including editing, proofreading, formatting, researching and more that can give students the confidence they need to write the perfect paper or dissertation for their chosen subject matter.

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