Question 3

a)Explain: "Antitrust is basically pro-business, because it is antimonopoly.To believe that it is antibusiness is to believe that monopoly is pro-business." (6 marks)

b)How effective have antitrust laws been in breaking up existing monopolies?(6 marks)

c)On occasion the government has approved the merging of certain smaller firms in oligopolistic industries (such as steel and automobiles) on the grounds that the net result would strengthen competition.Do you think that this is sound policy?Justify your answer.

(6 marks)

d)What has been the general approach to the enforcement of antitrust laws based on the type of mergers and price fixing among firms? (6 marks)

e)Evaluate the validity of the argument that a new industry in a nation needs protection from foreign competition if it is to prosper. (6 marks)

The possibility for gains trade is due to the fact that different countries face different resource endowments, production costs and geographical locations."Interpret and expand with examples.