Would the use of leverage meet the criteria for abuse of monopoly power outlined in the first paragraph?

on August 6 at 12:31PM

Help for the question

Hi, I used a bit of previous knowledge on this question, could you please explain how to go about this question in the context of the exam? Thanks in advance

3 Replies

Shunhe on August 6 at 05:08PM

Hi @ankita96,

Thanks for the question! First, a quick word: you might be able to get away with it sometimes, but in general, best practice dictates that we don’t use outside information on the LSAT. If you’re running out of time and need to make an educated guess and you bring in some outside information, fine. But otherwise, it’s best to double check with the information in the passage, since oftentimes the passage might contradict the outside knowledge, and when that happens, you have to go with the information in the passage, and not the outside knowledge.

Now onto this question: we’re asked about if the use of leverage would meet the criteria for abuse of monopoly power outlined in the first paragraph. So first things first, what is the use of leverage? We’re told in lines 50-52 that leverage is “the use of power in one market to reduce competition in another.” Next: what are the criteria for abuse of monopoly power in the first paragraph? Those are detailed in lines 10-13 (luckily, we’re told they’re in the first paragraph): a firm has to be shown to possess monopoly power, and the power has to be used to exclude competition in the monopolized market or related markets.

So does the use of leverage qualify? Well, it’s using power in one market to reduce competition in another. So that sounds like excluding competition in “related markets.” So sounds like the answer to this question would be “yes,” which eliminates (A) and (B). As for the specific reason, it’s because (as we mentioned) it’s eliminating competition in a related market. And that’s why (E) is correct.

Hope this helps! Feel free to ask any other questions that you might have.

on August 6 at 07:43PM

Hi, Yes I was actually unable understand if I was making the right inference so relied, usually I do refrain from usage of outside knowledge. Which is why I asked how to go about it. Thank you so much , this was helpful!!

Shunhe on August 7 at 05:19PM

Glad I was about to help!