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Why would a firm choose to use one or more of the anticompetitive practices described in; ?

a. To reduce its costs
b. To increase market competition
c. To increase consumer welfare
d. To gain a competitive advantage

User Keena
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1 Answer

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Final answer:

Firms engage in anticompetitive practices to gain a competitive advantage, often leading to increased profits and market power, but at the risk of harming competition and facing legal consequences. The enforcement of antitrust laws aims to prevent such behavior and protect a fair market environment.

Step-by-step explanation:

A firm might engage in anticompetitive practices, as described in regulating anticompetitive behavior, primarily to gain a competitive advantage. Practices such as tie-in sales, bundling, and predatory pricing can be strategically used to either increase market share, reduce costs, or create barriers to entry for other competitors. These activities are often aimed at maximizing a firm's profits and market power, but they can potentially lead to antitrust violations, as they may unfairly restrict competition and harm consumer welfare.

Regulators like antitrust authorities exist to prevent companies from colluding or engaging in behavior that stifles competition. While some companies may argue in favor of economies of scale and lower costs, the broader impact on the market and innovation must be considered. The goal of antitrust laws is to maintain a fair competitive landscape for all businesses while ensuring that consumers have access to a variety of products and services at reasonable prices.

User Pupkin
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